Two U.S. importers have filed a lawsuit against the federal government challenging a new wave of Section 301 tariffs, alleging that the levies are an improper workaround designed to reinstate previously struck-down trade duties.
The suit, filed in the U.S. Court of International Trade by spice importer Burlap & Barrel and watch retailer Collective Horology, calls for the immediate removal of the duties alongside full refunds for impacted businesses.
The Background: From IEEPA to Section 122 to Section 301
The contested Section 301 tariffs—targeting forced labor policies across more than 60 trading partner nations—went into effect on the exact day the lawsuit was filed. Crucially, this marked the end of a 150-day window following the administration’s implementation of temporary Section 122 tariffs.
Under federal statute, Section 122 duties automatically lapse after 150 days unless extended by Congress. President Donald Trump originally instituted the Section 122 levies after a Supreme Court ruling struck down sweeping baseline tariffs (including a global 10% duty) that had been enacted using the International Emergency Economic Powers Act (IEEPA).
According to the complaint, the new Section 301 duties are not a genuine attempt to reform foreign labor practices, but rather a direct replacement for the invalid IEEPA tariffs.
“The rates imposed by the Section 301 Action closely track the rate structure previously imposed or negotiated under the invalidated IEEPA program, including its 10 percent baseline tariff and additional country-specific rates,” the lawsuit states.
Core Arguments Presented in the Lawsuit
The plaintiffs argue that the administration failed to meet standard procedural and statutory requirements under Section 301, pointing to several key violations:
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Pre-Determined Rates: The filing alleges that the administration fixed the target tariff rates (10% to 12.5%) prior to finishing its investigation, later assembling supporting evidence to match predetermined numbers.
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Abbreviated Investigation Timeline: U.S. Trade Representative (USTR) Jamieson Greer launched the forced labor investigation in March and concluded it in under three months. By comparison, previous Section 301 investigations—such as the first Trump administration’s probe into China’s technology and intellectual property practices—took more than twice as long.
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Lack of Country-Specific Analysis: Plaintiffs argue that the USTR failed to provide a detailed, country-by-country breakdown demonstrating how forced labor regulations in each of the 60+ nations burden U.S. commerce, or how import tariffs would reasonably remedy global labor standards.
Legal and Supply Chain Impact
Trade policy experts suggest the administration faces an uphill legal battle to justify the uniform rate structure across dozens of distinct economies.
The court must ultimately decide whether the USTR genuinely evaluated each trading partner’s specific regulations or used a generalized finding on global forced labor as justification for broad duty collection. In the meantime, importers and supply chain leaders face renewed financial pressure and regulatory uncertainty as the litigation moves forward.
