Two U.S. Small Businesses File Lawsuit Challenging Section 301 Forced Labor Tariffs as Illegal

▲ Container ships behind the U.S. flag at the Port of Los Angeles

Two U.S. small businesses have filed a lawsuit arguing that the 10% to 12.5% "forced labor tariffs" newly imposed by the U.S. administration of Donald Trump on dozens of trading partners are illegal, according to a report by The New York Times.

According to the report on the 24th local time, spice importer Burlap & Barrel and watch retailer Collective Horology filed the lawsuit in the U.S. Court of International Trade, claiming that the latest enforcement measures imposed by the Trump administration under Section 301 of the Trade Act exceeded the president's taxation authority.

The lawsuit was filed just hours after the forced labor tariffs went into effect at 12:01 a.m. on the 24th.

In their complaint, the plaintiff companies argued that for the new tariffs to have legal justification, they must be supported by more specific country-by-country investigative findings regarding forced labor.

The plaintiffs also argued that President Trump and White House aides had previously stated a desire to recreate reciprocal tariffs—which were invalidated by a Supreme Court ruling—by utilizing Section 301, and that the Office of the United States Trade Representative (USTR) reflected a predetermined conclusion in its investigative results.

"These statements support the inference that the Section 301 tariffs were not chosen from the outset to remedy specific practices of individual countries, but rather designed to directly replace the invalidated global tariff system," they stated in the lawsuit.

Last February, the U.S. Supreme Court ruled illegal the reciprocal tariffs that the Trump administration had imposed on various countries based on the International Emergency Economic Powers Act (IEEPA).

In response, the Trump administration imposed a 10% global tariff on countries worldwide under Section 122 of the Trade Act, but because it was limited to a maximum of 150 days, the expiration deadline was midnight on the 24th.

Consequently, the USTR announced the previous day that it would apply Section 301, citing the issue of importing products manufactured with forced labor, to finalize tariffs of 10% to 12.5% on major trading partners.

South Korea also effectively faced a 12.5% tariff.

(Photo: Getty Images)

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