Two Small American Businesses Sue Trump Over New Tariffs 2026

Two small American businesses have filed a lawsuit against the Trump administration over its newly announced tariffs, challenging the president's use of executive authority to impose sweeping import duties. The case reignites a legal battle over trade policy that recently reached the U.S. Supreme Court.

Understanding the Lawsuit Against Trump's Tariffs

The lawsuit was brought by the Liberty Justice Center, which previously won a Supreme Court case that forced the administration to unwind many of its earlier tariff measures. The latest round of tariffs, announced late Thursday, imposes a 10% or 12.5% levy on goods from more than 80 countries under Section 301 of the 1974 Trade Act. The plaintiffs argue that the Trump administration has exceeded the limited authority granted by Section 301, which was intended for targeted, country-specific and practice-specific remedial actions rather than broad, sweeping duties.

Key Plaintiffs: Burlap & Barrel and Collective Horology

The two businesses pursuing the legal action are Burlap and Barrel, a New York-based spice importer, and Collective Horology, a California watchmaker. Both companies rely on imports from many of the nations now subject to the new tariffs. Burlap and Barrel sources spices from Canada, India, Spain, Turkey and Vietnam, while Collective Horology distributes watches from various global suppliers. The tariffs threaten to raise their costs significantly, potentially harming their operations and employees.

Legal Arguments Against Section 301 Tariffs

The plaintiffs contend that the Trump administration's actions violate the scope of Section 301, which was designed to combat forced labor and other unfair trade practices through precise, remedial measures. They also allege that the U.S. Trade Representative (USTR) failed to provide a reasoned, record-based explanation for its determinations, and that more country-specific findings about forced labor are necessary to legally justify the tariffs. The USTR did not immediately respond to a request for comment.

Comparison of Past and Current Tariff Approaches

Key Takeaways for Business Owners and Importers

• Legal uncertainty: The lawsuit could lead to a court order blocking or modifying the tariffs, but the process may take months.
• Supply chain risk: Businesses sourcing from the 80+ affected countries should prepare for higher costs and potential disruptions.
• Executive authority limits: The Supreme Court's earlier 6-3 ruling suggests limits on unilateral tariff power, but the administration may find alternative pathways.
• Forced labor rationale: The USTR must provide stronger evidence linking each country to forced labor to justify Section 301 tariffs.

FAQ

As this legal challenge unfolds, importers and trade stakeholders should monitor court rulings closely. The outcome could redefine the limits of presidential authority over tariffs and have lasting effects on U.S. trade policy. For updates on this case and other business news, stay tuned to GrandGoldman.com.