Two small businesses filed a new lawsuit on July 24, 2026, challenging the Trump administration’s latest tariffs under Section 301 of the Trade Act of 1974. Burlap & Barrel and Collective Horology brought the case in the U.S. Court of International Trade, arguing that Section 301 does not authorize near-universal tariffs imposed through a worldwide forced-labor trade action. For example, an importer bringing in a covered product from one of the affected economies may now owe an additional duty even if neither the importer nor the product has been accused of involving forced labor. The case is *Burlap and Barrel, Inc. v. Greer et al.*, Case No. 1:26-cv-03345-N/A. The defendants include the Office of the U.S.
Trade Representative, U.S. Trade Representative Jamieson Greer, President Donald Trump, U.S. Customs and Border Protection, and the United States. The complaint requests an injunction, invalidation of the tariff action, refunds with interest, legal fees, and certification of a proposed class of affected importers. No court has ruled on the claims, certified a class, or ordered refunds. The dispute should not be described simply as another China tariff case. The challenged action followed USTR investigations into 60 economies’ alleged failure to prohibit and effectively enforce bans on imports made with forced labor. According to USTR, those economies account for 99.4% of U.S. imports, giving the policy exceptionally broad commercial reach.
Table of Contents
- Why Are Small Businesses Challenging Trump’s Section 301 Tariffs?
- How the Worldwide Forced-Labor Tariffs Work
- Forced-Labor Enforcement and the Government’s Procedural Record
- What Importers Should Do While the Lawsuit Is Pending
- The Class Action, Constitutional Claim, and Requested Remedies
- Which Products Are Exempt From the New Duties?
- What the Court Has and Has Not Decided
- Frequently Asked Questions
Why Are Small Businesses Challenging Trump’s Section 301 Tariffs?
The plaintiffs contend that the administration has stretched a targeted trade-enforcement statute into authority for broad tariffs covering most U.S. imports. Section 301 allows the government to respond to certain foreign acts, policies, and practices that burden or restrict U.S. commerce. According to the [complaint](https://libertyjusticecenter.org/wp-content/uploads/002-Burlap-and-Barrel-v.-Greer-Compl-2026-07-24.pdf), that framework requires a meaningful connection among an identified country, a specific objectionable practice, the burden on American commerce, and the responsive trade measure. Burlap & Barrel and Collective Horology allege that USTR did not adequately establish those country-specific connections.
They also argue that the government did not sufficiently explain how tariffs across broad categories of products would eliminate the alleged failures to block forced-labor goods. These are the plaintiffs’ allegations, not findings by the Court of International Trade. The comparison at the center of the case is one of scope. A traditional Section 301 action might target a defined practice in a particular country and apply duties calibrated to that dispute. This action reaches 60 economies and, by USTR’s own estimate, jurisdictions responsible for 99.4% of American imports. The plaintiffs say that difference is not merely a matter of size; it changes Section 301 from a focused remedy into something resembling a general tariff power.
How the Worldwide Forced-Labor Tariffs Work
The tariffs generally apply to covered goods entered for consumption, or withdrawn from a warehouse for consumption, on or after 12:01 a.m. Eastern on July 24, 2026. The [USTR notice of determinations](https://ustr.gov/sites/default/files/files/Press/Releases/2026/FLIP%20301%20Investigation%20Final%20Action%20FRN%207-23-26%20FINAL.pdf) provides a narrow in-transit exception for qualifying goods through July 28. Importers should not assume that an earlier purchase order, payment, or shipping date is enough; the entry rules and the exception’s conditions matter. The rates are not uniformly 10% or 12.5%. Under the [presidential memorandum](https://www.whitehouse.gov/presidential-actions/2026/07/actions-by-the-united-states-in-the-investigations-under-section-301-of-the-trade-act-of-1974-of-the-acts-policies-and-practices-of-60-economies-related-to-the-failure-of-each-economy-to-impose-and/), 17 named economies receive a 10% tariff.
Covered goods from the European Union and Taiwan can be topped up so that their combined most-favored-nation and Section 301 rate reaches 10%. Goods from Japan, South Korea, and Switzerland can be topped up to a combined 12.5%, while other covered economies receive a 12.5% duty. That structure can produce different Section 301 charges on goods with the same customs value. If a product subject to a 4% ordinary tariff is covered by a top-up-to-10% rule, the additional Section 301 component would generally be 6 percentage points. A separately covered product subject to a flat 12.5% Section 301 duty could face the entire additional rate. Classification, origin, existing tariff treatment, and exemptions can therefore be as important as the invoice amount.
Forced-Labor Enforcement and the Government’s Procedural Record
USTR initiated the 60 investigations on March 12, 2026, and announced actionability findings on June 2. The agency accepted written comments through July 6 and held hearings on the proposed responsive action from July 7 through July 9. In its [final-action release](https://ustr.gov/about/policy-offices/press-office/press-releases/2026/july/ustr-takes-action-forced-labor-section-301-investigations), USTR said it received more than 1,600 written comments and heard testimony from more than 100 witnesses. That record gives the government an answer to any suggestion that the tariffs appeared without notice or public participation.
The administration can point to investigations, formal findings, comments, hearings, and a presidential directive. The plaintiffs’ challenge goes further, however: they argue that completing procedural steps does not cure a failure to establish the statutory findings required for each economy or to connect the selected tariffs to the identified practices. The distinction matters in practical terms. A government agency might compile extensive evidence that a foreign jurisdiction inadequately enforces a forced-labor import ban, yet still face questions about why an unrelated category of lawful goods should carry an additional tariff. The lawsuit does not dispute that forced labor is a serious problem; it disputes whether this particular statutory tool and this breadth of tariff action are lawful.
What Importers Should Do While the Lawsuit Is Pending
Affected businesses should continue treating the duties as operative unless a court or the government changes the rules. Filing a complaint does not itself suspend tariff collection. Importers should preserve entry summaries, tariff classifications, country-of-origin records, commercial invoices, proof of duty payments, and any documents supporting an exemption or the July 28 in-transit exception. Businesses should also calculate exposure entry by entry.
A company paying a 10% additional duty on $100,000 in covered customs value faces $10,000 in added tariff expense, while a 12.5% duty on the same value produces $12,500. That difference can affect pricing, working capital, supplier negotiations, and the economic practicality of importing a low-margin product. There is also a tradeoff between immediate operational certainty and preserving legal options. Paying the required duty may be necessary to secure entry, but businesses should consult qualified customs counsel about administrative deadlines, liquidation, protests, and record preservation. An importer should not assume that participating in a proposed class will automatically protect every claim or deadline, particularly because the court has not certified any class.
The Class Action, Constitutional Claim, and Requested Remedies
The plaintiffs ask the court to certify a class consisting of importers of record that paid or will pay the challenged duties on entries beginning July 24, 2026. That request could make the case financially significant for businesses too small to litigate separately. But the proposed class does not yet legally exist: the court must decide whether certification requirements are satisfied and who, if anyone, falls within the class definition. The complaint also alleges that USTR acted arbitrarily and capriciously.
In general terms, the plaintiffs claim that the agency did not provide the country-specific analysis or reasoned connection between the alleged forced-labor policies and the sweeping tariff response that the law requires. They seek vacatur of the action and an injunction against the duties, along with refunds and interest for affected entries. As an alternative argument, the plaintiffs contend that if Section 301 does authorize tariffs this broad, the statute represents an unconstitutional delegation of legislative power. That claim presents a warning against overstating the case: pleading a constitutional theory does not mean a court will reach it. Courts can reject a case on jurisdictional or statutory grounds, uphold the agency’s interpretation, or resolve a dispute without deciding the broadest constitutional question.
Which Products Are Exempt From the New Duties?
The action contains product exemptions, so coverage is broad but not absolute. According to the [USTR fact sheet](https://www.ustr.gov/about/policy-offices/press-office/fact-sheets/2026/july/fact-sheet-ustr-section-301-action-response-failure-60-economies-ban-imports-produced-forced-labor), exemptions include certain raw materials, products whose taxation could cause economy-wide disruption, and products that cannot be obtained in sufficient quantities or at reasonable prices in the United States.
Articles already covered by Section 232 measures are also excluded. An importer cannot safely rely on a general description such as “raw material” or “essential product.” Eligibility ordinarily turns on the governing tariff classifications and the precise language of the exclusion. Two visually similar goods can receive different treatment if they fall under different tariff provisions or have different countries of origin.
What the Court Has and Has Not Decided
As of July 25, 2026, the Court of International Trade has not ruled that the tariffs are unlawful, issued the requested injunction, certified the proposed importer class, or ordered the government to issue refunds. The only operative litigation positions are the allegations in the plaintiffs’ July 24 complaint and the government action announced the previous day.
The current concrete dates remain important for import records: July 24 is both the lawsuit’s filing date and the general effective date for covered entries, while July 28 marks the end of the narrow in-transit exception described in USTR’s notice. The proposed class reaches importers of record that paid or will pay the challenged duties on entries from July 24 onward.
Frequently Asked Questions
Is this lawsuit only about tariffs on China?
No. It challenges a forced-labor Section 301 action involving 60 economies that USTR says account for 99.4% of U.S. imports.
Who filed the lawsuit?
Burlap & Barrel and Collective Horology filed *Burlap and Barrel, Inc. v. Greer et al.* in the U.S. Court of International Trade on July 24, 2026.
Are the tariffs currently being collected?
Yes. They generally apply to covered entries from 12:01 a.m. Eastern on July 24, subject to product exclusions and a narrow in-transit exception through July 28.
Is every covered import subject to the same rate?
No. The action uses 10% and 12.5% duties as well as top-up structures that account for existing most-favored-nation rates.
Has the court certified a class or ordered refunds?
No. Class certification, injunctive relief, invalidation of the tariffs, and refunds with interest are remedies requested by the plaintiffs but not yet granted.