On the very day the US 301 tariffs took effect, two small domestic businesses filed a lawsuit at the US Court of International Trade, arguing these new tariffs exceed the government’s legal authority to impose duties.
According to reports, the two small businesses’ complaint states that the US government, citing Section 301 of the Trade Act of 1974, slapped tariffs of 10% to 12.5% on dozens of countries and regions under the guise of so-called “forced labor.” However, the government failed to make more specific factual determinations about the alleged “forced labor” issues in those countries, which isn’t enough to legally justify such a sweeping tariff imposition.
The complaint further argues that Section 301 was historically used to target specific countries or industries, but applying it so broadly to dozens of nations and regions has no precedent. The plaintiffs claim the government is essentially re-implementing large-scale tariffs that the US Supreme Court had already ruled illegal. They’re asking the trade court to declare the tariffs unlawful, block their enforcement, and preserve importers’ ability to get refunds for any illegal duties paid.
The small businesses leading the charge include Burlap & Barrel, a New York-based spice importing retailer that sources ingredients from small farms worldwide and boasts over 13,000 five-star reviews across its platforms. The other is Collective Horology, a California-based watch retailer.
Back in February, after the Supreme Court overturned his “reciprocal tariff” policy, the Trump administration announced a 10% global tariff on all countries under Section 122 of the Trade Act of 1974. This forced Burlap & Barrel to shoulder about $60,000 in extra import costs, putting serious pressure on its business—so they sued. On May 7, the US Court of International Trade ruled that the Section 122 tariffs didn’t meet the legal trigger conditions, handing Burlap & Barrel a win.
This time, both companies are again backed by the nonprofit legal group “Liberty Justice Center,” which has won several previous rounds of litigation.
Several states led by Democratic politicians have joined earlier legal challenges. Oregon Attorney General Dan Rayfield said the new tariffs will raise living costs for ordinary Americans, and his state is considering joining a third lawsuit.
Just as the 150-day global interim tariff expired this Friday, the Trump administration rolled out new tariffs: an extra 10% on 14 economies including Canada, the EU, and the UK—which have already implemented some “forced labor” controls—and an extra 12.5% on 46 economies like China, Hong Kong, Japan, South Korea, Vietnam, India, and Australia.
These new tariffs stack on top of already-active ones, with only certain agricultural products, medicines, aircraft parts, and steel/aluminum getting exemptions.
Section 301 of the Trade Act of 1974 authorizes the US Trade Representative to investigate “unreasonable or unfair trade practices” by other countries and recommend the president impose unilateral sanctions. Compared to earlier emergency powers, this new measure has stronger legal footing, making it much harder for courts to overturn directly.
Overall, targeted countries are responding with strategies like challenging the tariffs through WTO rules, imposing reciprocal tariffs as defense, and accelerating supply chain diversification to reduce reliance on the US.
In its white paper on Sino-US economic and trade relations, China made it clear that the US 301 tariffs are a textbook example of unilateralism and protectionism, seriously violating multilateral trade rules. They not only disrupt global supply chains but also fail to solve America’s own trade problems—instead, they drive up domestic costs.
A spokesperson from China’s Ministry of Commerce responded by noting that the US still hasn’t ratified the Forced Labour Convention of 1930, rejecting international rules while constantly manipulating the “forced labor” narrative. Launching a 301 investigation against China and other economies to build trade barriers is highly unilateral, arbitrary, and discriminatory—a classic protectionist move.
Analysts told us earlier that the 301 tariffs’ impact on the global economy is limited—markets had widely expected this. The US effective tariff rate remains under 10%, so the effect on the economy or inflation is minimal. Many countries are reluctant to take a confrontational stance due to their own economic vulnerabilities or strategic considerations.