Two small businesses sue Trump administration over forced-labor tariffs on 60 economies

Under the new policy, tariff rates of 10 percent and 12.5 percent took effect on Friday, immediately replacing a temporary 10 percent global surcharge whose statutory window had just expired. The duties target products from 60 economies, including Canada, Mexico, and the European Union, with the stated justification that those trading partners were not doing enough to stop the export of goods produced with forced labor.

Legal grounds

In their complaint, the plaintiffs argue that the Office of the U.S. Trade Representative failed to demonstrate how the tariffs would change the targeted economies' forced-labor policies. They contend that the administration unlawfully relied on Section 301 of the Trade Act of 1974 to impose the duties.

The lawsuit further argues that the new tariffs require more detailed country-specific findings about forced labor to be legally justified. Without those findings, the plaintiffs contend, the duties amount to an attempt to reimpose tariffs that the U.S. Supreme Court has already ruled illegal in the Liberty Justice Center's earlier challenge.

The Liberty Justice Center has framed the suit as a continuation of its earlier legal fights against broad-based tariff orders. The firm pointed to its Supreme Court victory as evidence that courts have been receptive to challenges grounded in the procedural requirements of U.S. trade law.

Impact on the plaintiffs

Supporters of the administration's trade policy have described tariffs as a central lever for negotiating with foreign governments. The new duties continue an approach that places duties on imports from a wide range of partners rather than relying on country-by-country agreements.

For Burlap & Barrel, which sources single-origin spices from abroad, and Collective Horology, which sells imported watches, the tariffs translate directly into higher costs on their inventories. Both companies have said the duties disrupt supply chains they have spent years building.

The case is likely to test how broadly courts will allow the executive branch to use Section 301 in circumstances touching on labor rights. A ruling for the plaintiffs could force the administration to redo country-by-country analyses before reimposing any of the contested duties.

What happens next

The filing adds to a growing body of litigation over the administration's aggressive use of tariffs. While previous rounds of duties have prompted separate challenges, this case focuses narrowly on the forced-labor rationale and the procedural record supporting it.

The administration has not yet publicly responded in court to the complaint. The U.S. Court of International Trade is expected to set a briefing schedule in the coming weeks.