A spice company and a watch shop are taking on the federal government over tariffs that now touch nearly every product entering the United States. On July 24, 2026, Burlap & Barrel and Collective Horology filed a lawsuit in the U.S. Court of International Trade challenging the Trump administration’s new Section 301 tariffs, which add 10% or 12.5% duties on imports from 60 economies.
Those 60 trading partners account for roughly 99.4% of all U.S. imports. For any small business that buys goods or materials from abroad, the math changed overnight.
What the lawsuit argues
The case, backed by the public-interest law firm Liberty Justice Center, alleges that the Office of the U.S. Trade Representative stretched a targeted trade-remedy law into a sweeping import tax. Liberty Justice Center CEO Sara Albrecht said in a statement that “an important objective does not give the government permission to ignore the law.”
The complaint calls the tariffs “arbitrary and capricious,” arguing that USTR applied near-uniform rates across countries with very different forced-labor records and trade profiles without providing a reasoned, country-by-country justification. It was filed as a proposed class action covering all importers of record who will pay the new duties.
A second lawsuit was filed the same day by seven other businesses, including two educational toymakers that previously challenged the administration’s IEEPA tariffs at the Supreme Court. Twenty-five state attorneys general piled on with their own challenge on August 3.
Why small importers are feeling the squeeze
The new Section 301 duties took effect on July 24, the same day the temporary Section 122 tariffs expired after hitting their 150-day statutory limit. The administration framed the new tariffs as a response to foreign governments’ failure to ban goods produced with forced labor. Critics call them a replacement for the global tariff regime that courts already struck down.
Research from the American Action Forum estimates direct tariff costs for U.S. small businesses at roughly $85 billion annually, potentially reaching $100 billion. Unlike large companies with dedicated trade-compliance teams, small importers often lack the resources to navigate exemptions, reclassify products, or restructure supply chains quickly.
Business owners who import from any of the 60 affected economies should review whether their specific product codes qualify for any of the 471 newly exempted tariff subheadings. Filing an administrative protest with U.S. Customs and Border Protection now could preserve the right to a refund if the tariffs are later struck down.
The Court of International Trade has not yet set a schedule for hearing the case. With three separate lawsuits now challenging the same tariffs, the next few months will determine whether small importers keep paying the additional duties or get their money back.
