A new legal battle has emerged against the Trump administration over the latest global tariffs implemented on Friday, July 24, 2026. Two small companies brought a case before the US Court of International Trade, asserting that President Donald Trump and US officials unlawfully used the 1974 Trade Act's Section 301 to reimpose duties that the Supreme Court had earlier ruled invalid.
On Thursday, the Trump administration said the US would impose duties ranging from 10% to 12.5% on imports from nearly all key trading partners. This action under Section 301 came after an investigation into claims that about 60 nations were not preventing forced labor in their supply chains, harming American workers.
President Trump is trying to resurrect a tariff scheme that the Supreme Court struck down in February, having concluded that his worldwide duties imposed via the International Emergency Economic Powers Act (IEEPA) were illegal. He then enacted 10% worldwide tariffs through Section 122 of the Trade Act; a trade court found them illegal but permitted them to remain while an appeal was underway. Those Section 122 tariffs are set to end on Friday.
Under Section 301, the US Trade Representative, acting on the president's instructions, can levy tariffs against other countries' trade practices that are considered unfair to US businesses or that breach American rights under global trade pacts.
Get the market news that matters in a five-minute read with Market Briefs, our free daily newsletter
Representatives from the USTR, the White House, and the Justice Department did not reply to requests for comment. In their complaint, attorneys representing the two small firms claimed the new duties did not incorporate the "country-specific inquiry" that lawmakers intended when crafting Section 301. The lawsuit is structured as a potential class action that includes every importer of record who will be subject to the new tariffs.
"It is not a freestanding authorization to tax substantially all imports from substantially all trading partners at rates selected to replicate the invalidated IEEPA tariff regime," they wrote.
The plaintiffs contend that the USTR did not provide sufficient reasoning about how each country's specific practices harm US commerce, instead offering broad claims about forced labor's impact on supply chains.
"Sara Albrecht, chief executive officer of the Liberty Justice Center, which represents the small businesses, said in a statement that" "forced labor is morally indefensible, but an important objective does not give the government permission to ignore the law."
The Liberty Justice Center has previously litigated against both the IEEPA and Section 122 tariffs. This new case emerges while the administration still deals with the repercussions of the IEEPA duties.
Since the Supreme Court struck down those duties, customs officials have faced refund claims from thousands of companies that had paid approximately $166 billion in tariffs. The ongoing disputes over IEEPA refunds provide a preview of the administrative and legal hurdles that await everyone involved in opposing the latest duties under Section 301: the government, importers, and the New York trade court. Earlier, the trade court rejected requests from businesses to halt enforcement of the IEEPA tariffs prior to the Supreme Court's decision, causing the amount of contested duties to accumulate and become more intricate over several months.
So far, the federal government has disbursed billions in refunds for IEEPA tariffs, yet the Justice Department is still disputing how much authority the trade court has to control the refund process. The government is contesting a judicial ruling that would mandate a blanket recalculation of tariffs for all importers who paid, claiming the judge may only direct orders to those directly involved in the case.
The case, Burlap and Barrel Inc. v. Greer, docket number 26-cv-3345, was filed at the federal trade court located in New York.
Join Market Briefs, our free daily newsletter, for a quick daily rundown of the markets
