Less than a day after new Section 301 tariffs took effect on roughly 80 countries, two small businesses filed suit challenging them in the U.S. Court of International Trade. The case, Burlap and Barrel Inc. v. Greer, argues the administration skipped the country-by-country legal process Congress required before imposing the duties — and it’s the first direct legal test of the tariffs that replaced the Section 122 tariffs covered here in CentsIQ’s July 21 and July 23 coverage.
What happened
The Liberty Justice Center filed the lawsuit on July 24, 2026, on behalf of Burlap & Barrel, a small business that sources single-origin spices directly from smallholder farmers and producer cooperatives, and Collective Horology, a California retailer and distributor supporting independent watchmakers. Both businesses depend on imports now subject to the new tariffs, which took effect at 12:01 a.m. EDT on July 24 and impose 10% or 12.5% duties on products from roughly 80 countries — covering an estimated 99.4% of all U.S. imports.
The tariffs were imposed under Section 301 of the Trade Act of 1974, officially justified by a probe into alleged failures by those countries to prevent forced labor in their supply chains. According to reporting on the filing, the lawsuit argues the U.S. Trade Representative’s office never conducted the country-specific investigations Section 301 requires — instead turning “separate investigations into a standardized global tariff program without documenting country-by-country evidence” of specific illegal practices, how they harm U.S. commerce, or how broad tariffs would actually change foreign governments’ behavior.
The suit asks the court to declare the tariffs unlawful, block their enforcement, and — for a proposed class of affected importers, not just the two named plaintiffs — refund tariffs already paid, with interest.
Why it matters
This is the same legal team, the Liberty Justice Center, that won a Supreme Court ruling in February 2026 striking down the prior round of tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The new Section 301 tariffs landed the same week the related Section 122 tariffs expired on their own 150-day statutory clock — and critics, including the plaintiffs’ lawyers, argue Section 301 is being used to reconstruct essentially the same broad tariff program the Supreme Court already rejected, just under different legal authority.
What this means for import-dependent small businesses
If your business imports goods now subject to these tariffs, don’t treat this lawsuit as a reason to pause tariff-related budgeting or pricing decisions — it’s a fresh filing in a slow-moving court process, with no ruling yet, and no guarantee of one before the tariffs cost you real money in the meantime. What it does mean: keep clean records of tariffs paid on affected entries starting July 24, since the lawsuit specifically seeks refunds with interest for a “proposed class” of affected importers if it succeeds. If a class does get certified later, businesses with documented tariff payments will be far better positioned to benefit than those without.
The plaintiffs argue Section 301 “is not a free-standing authorization to tax substantially all imports from substantially all trading partners at rates selected to replicate the invalidated IEEPA tariff regime.”
The bottom line
This is round one of what looks like another extended tariff legal fight, not a resolution. Small businesses that import from the roughly 80 affected countries should plan around the tariffs as currently in effect, while keeping documentation in order in case the courts — as they did with IEEPA — eventually side with importers again.
