Small businesses that rely on global supply chains are pushing back against new tariffs that could increase costs for imported goods, inventory, and materials.
Two groups of small businesses filed lawsuits in the U.S. Court of International Trade challenging the Trump administration’s new Section 301 tariffs, arguing the government exceeded its authority by applying broad import taxes across dozens of trading partners.
The tariffs, which took effect July 24, impose duties of 10% or 12.5% on products from 80 countries and cover about 99.4% of U.S. imports. The administration said the tariffs address concerns over foreign governments’ failure to prevent forced-labor products from entering global supply chains.
For many small businesses, the issue extends beyond the courtroom, as companies that import products often operate with narrower margins than larger competitors and have fewer options to absorb sudden increases in landed costs.
The lawsuits argue that the administration applied the tariffs too broadly and failed to show how taxing lawful imports from entire economies would directly address forced-labor concerns. The Liberty Justice Center filed one lawsuit on behalf of Burlap & Barrel, a spice retailer, and Collective Horology, a watch retailer and distributor.
“Forced labor is morally indefensible, but an important objective does not give the government permission to ignore the law,” said Sara Albrecht, Chairman and CEO of the Liberty Justice Center, in a statement. “Changing the statute doesn’t change the law.”
The legal challenge arises from ongoing tariff disputes impacting small businesses. The Liberty Justice Center previously represented these companies in challenging earlier tariff programs, arguing that broad import taxes impose financial strain on American businesses and consumers.
Meanwhile, trade experts say businesses should not expect a quick resolution. Unlike previous tariff challenges, the new policy relies on Section 301 of the Trade Act of 1974, which gives the government authority to respond to unfair foreign trade practices but requires specific findings and targeted action.
Why this matters
For small businesses, the outcome could determine whether importers continue paying higher costs, receive potential refunds, or face another round of supply chain adjustments. The lawsuit asks the court to block enforcement of the tariffs and preserve businesses’ ability to seek relief for duties already paid.
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