Small businesses sue Trump administration over new tariffs

Two small U.S. businesses sued the Trump administration Friday over a new round of tariffs imposed on dozens of trading partners, asking a federal trade court to block the duties less than a day after they took effect.

The lawsuit, filed in the U.S. Court of International Trade in New York, challenges tariffs the administration imposed under Section 301 of the Trade Act of 1974. NBC News reported the duties apply to 60 U.S. trade partners, while The Guardian described them as affecting more than 80 countries. The tariffs are aimed at countries the administration says engage in or fail to prevent trade involving forced labor.

The plaintiffs are Burlap & Barrel, a New York-based online spices retailer, and Collective Horology, a California-based retailer that the Liberty Justice Center says supports independent watchmakers. The Liberty Justice Center filed the case on their behalf. The group previously challenged tariffs Trump enacted under the International Emergency Economic Powers Act and won a major ruling against the government at the Supreme Court.

The complaint asks the court to stop the government from enforcing or collecting the new duties and to refund tariffs it says were unlawfully collected under the Section 301 action. It argues that the U.S. trade representative acted “arbitrarily and capriciously” by applying broad tariffs across many different economies without the country-specific findings required by law.

“The case does not dispute that governments should combat forced labor,” the Liberty Justice Center said in a statement. “It challenges USTR’s authority to impose sweeping tariffs without satisfying Section 301’s country-specific findings and remedial requirements.”

The new tariffs replaced a temporary global 10% tariff that expired at midnight, NBC News reported. The latest duties range from 10% to 12.5%, with exceptions for some foods and fuels, and exclusions for automobiles and some metals. The Guardian reported that the earlier blanket 10% tariff had been imposed in February, after the Supreme Court declared many of Trump’s earlier tariffs illegal.

Unlike the earlier tariffs struck down by the Supreme Court, the administration used Section 301 for the latest duties. NBC News reported that the administration conducted months-long investigations into dozens of trading partners before imposing them. The U.S. trade representative said those investigations found the economies had failed “to impose and effectively enforce a prohibition on the importation of goods produced with forced labor.”

“This is the third time the administration has attempted to impose its global tariff policy without following the statutory limits,” Jeffrey Schwab, director of litigation at the Liberty Justice Center, said in a statement. Schwab said Section 301 “is not a freestanding authorization to tax substantially all imports from substantially all countries at preestablished rates.”

Several major U.S. trading partners rejected the administration’s forced labor accusations. European Commission chief spokesperson Paula Pinho told reporters, “We do not agree with the premise of this Section 301 investigation on forced labor, and we had communicated this also to our US counterparts.” She added, “We fully reject the notion that the EU could be considered as contributing to the global problem of forced labor.”

Brazil’s government said in a news release that, “In the absence of a domestic legal basis to sustain its protectionist trade policy, the USTR opted to manipulate an issue of great importance to human rights and to the struggle of workers around the world in order to accuse 59 countries and the European Union of unfair practices.” A Japanese government spokesperson called the new duties “regrettable” and said Japan’s economy operates “in line with international rules.”

The White House did not immediately respond to NBC News’ request for comment on the lawsuit.