Small businesses launch new Trump tariff challenge

The small businesses that brought two high-profile legal challenges to President Trump's trade agenda are suing to block the latest round of tariffs.

Why it matters: The lawsuits set up another legal test of Trump's tariff agenda after courts this year rejected one tariff regime and cast doubt on another.

What's new: One lawsuit was filed on behalf of Burlap & Barrel, which previously challenged Trump's temporary Section 122 tariffs, and watch retailer Collective Horology.

• The other was brought by toymaker Learning Resources — which won a Supreme Court case overturning Trump's tariffs under the International Emergency Economic Powers Act— along with a flooring manufacturer and affiliated firms.

Catch up quick: The lawsuits challenge the administration's new tariffs imposed under Section 301 of the Trade Act, which took effect last week as the White House's temporary Section 122 levies expired.

• The action generally imposes tariffs of 10% or 12.5% on imports from more than 60 economies that the Trump administration says failed to adequately block goods made with forced labor.

What they're saying: The Liberty Justice Center, representing Burlap & Barrel and Collective Horology, argues that the administration stretched what Congress intended as a targeted trade remedy into a sweeping global tariff regime.

• U.S. Trade Representative Jamieson Greer "determined the tariff rates first ... and assembled economy-specific findings afterward to justify them," the public interest law firm, which previously represented businesses challenging Trump's tariffs, alleges in a complaint.

The suit filed on behalf of Learning Resources says Trump officials relied on generalized findings rather than demonstrating how each country's practices burdened U.S. commerce, as the statute requires.

• The complaint alleges that the administration imposed the same set of sweeping global tariffs after earlier legal defeats: "The third time's not the charm," the complaint says.

What they're saying: Collective Horology co-founder Asher Rapkin tells Axios that the earlier tariff regimes cost the watch retailer more than $160,000, with refunds from the earlier invalidated tariffs still outstanding.

• "Section 301 tariffs are most definitely going to hamstring my business in the exact same way that the previous two phases of tariffs have," Rapkin says.
• The company imports watches from Switzerland, where Rapkin says there is virtually no U.S. manufacturing alternative.

Flashback: Courts have already rejected Trump's first attempt to impose sweeping tariffs under emergency powers, while a separate challenge to his temporary replacement tariffs under Section 122 remains on appeal.

• Now: The challenge has shifted from whether the administration has tariff authority to how officials are exercising their trade power.

The other side: The White House did not respond to a request for comment.

• A senior administration official last week defended the tariffs as a legitimate use of Section 301, saying they are designed to eliminate unfair trading practices rather than replace the administration's earlier tariff programs.

The bottom line: Small businesses have been consequential players in the fight over Trump's tariff power, repeatedly forcing the administration back into court as it pivots from one legal authority to the next.