Two US small businesses sue over Trump's new round of forced labour tariffs

Two US small businesses filed suit on Friday, 24 July 2026, in the US trade court in New York against Donald Trump's latest round of tariffs on goods from 60 trading partners. They argue that the policy, like most of Trump's earlier tariffs, goes beyond the president's authority to tax imports, and that the measures would require far more detailed country by country findings on forced labour to be legally justified.

The Trump administration imposed the new 10 percent and 12.5 percent tariffs on 60 trading partners, including the European Union, on Friday, on the grounds that they were not doing enough to stop exports of goods made with forced labour; the tariffs took effect just as a temporary 10 percent global tariff expired. The US Supreme Court ruled against Trump's broadest tariffs on 20 February, finding that the International Emergency Economic Powers Act does not authorise a president to impose tariffs unilaterally.

The new tariffs were imposed under Section 301 of the Trade Act of 1974. Jeffrey Schwab, a lawyer at the Liberty Justice Center representing the businesses, said Section 301 contains no authority to tax substantially all imports from substantially all countries at preestablished rates. The plaintiffs, spice importer Burlap and Barrel and California watch retailer Collective Horology, have asked the court to declare the tariffs unlawful and to preserve importers' ability to receive refunds.