Trump Tariffs Lawsuit: Two Small Businesses Fight New Trade... 2026

Trump tariffs are facing a fresh legal challenge as two small American businesses sue the Trump administration over its latest round of sweeping import duties. The lawsuit, filed by the Liberty Justice Center, argues that the president exceeded his executive authority under Section 301 of the 1974 Trade Act. This follows a Supreme Court ruling earlier this year that forced the administration to unwind many of its controversial tariffs. The new tariffs, announced late Thursday, impose 10% or 12.5% levies on goods from more than 80 countries, affecting importers across the United States.

Why These Two Small Businesses Are Challenging Trump Tariffs

The plaintiffs—Burlap and Barrel, a New York-based spice importer, and Collective Horology, a California watchmaker—source materials from many nations hit by the tariffs. Burlap and Barrel imports spices from Canada, India, Spain, Turkey, and Vietnam. Collective Horology distributes watches from multiple global suppliers. Both argue the tariffs are not targeted as the law requires but instead impose broad duties that harm their operations.

Their lawsuit claims the U.S. Trade Representative (USTR) failed to provide a reasoned, record-based explanation for the tariffs. They assert that Section 301 is meant to be “targeted, country-specific and practice-specific remedial authority,” not a blanket tool for economic policy. The administration used this same section during Trump’s first term for tariffs on China, which survived earlier court challenges. However, the latest legal action seeks to limit its scope.

What’s at Stake for Importers and Small Businesses

If successful, this lawsuit could force the government to narrow its tariff policy, requiring specific evidence of forced labor for each country before imposing duties. That would protect small importers from sudden cost increases and supply chain disruptions. Here’s a comparison of the two plaintiffs’ exposure:

The Liberty Justice Center, which won a Supreme Court case against Trump’s earlier tariffs, now leads this challenge. Their victory earlier forced the administration to backtrack, but Trump has sought alternative legal pathways to make his trade policy permanent without Congress. The new lawsuit directly tests whether Section 301 can be used so broadly.

Key Takeaways for Businesses and Consumers

• Trump tariffs remain legally contested; small businesses may find relief through ongoing lawsuits.
• Section 301 requires targeted, country-specific findings—broad duties may be unconstitutional.
• Importers like spice and watch suppliers face higher costs, which could be passed to consumers.
• The Supreme Court’s earlier 6-3 ruling limiting executive tariff power sets a strong precedent.
• Businesses should monitor legal developments to adjust sourcing and pricing strategies.

FAQ About the Trump Tariffs Lawsuit

FAQ

The outcome of this lawsuit could redefine how the U.S. imposes trade duties under Section 301. For small businesses dependent on global supply chains, the stakes are high. Legal experts expect the case to move quickly given the Supreme Court’s prior stance. Meanwhile, the USTR has not commented on the filing. Importers should stay informed as further developments unfold.

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