Legal resistance to President Donald Trump’s temporary 10% global tariff is intensifying, with two small businesses now challenging the measure in the US Court of International Trade.
The plaintiffs — spice company Burlap and Barrel and toy maker Basic Fun — argue that the administration is unlawfully using Section 122 of the Trade Act of 1974 to impose a broad tariff that does not meet the law’s original requirements.
Section 122 allows a US president to impose tariffs of up to 15% for no more than 150 days in order to address a balance-of-payments deficit. The businesses argue that the administration is wrongly treating the country’s trade deficit as though it were the same thing.
For Burlap and Barrel, the concern is immediate and practical. The company says many of its imported spices are simply not available from domestic US sources, making substitution impossible. The tariff therefore raises costs without offering any realistic alternative.
Basic Fun, whose brands include Tonka and Care Bears, makes a similar case from a manufacturing standpoint. The company says the United States does not currently have the supplier base or production scale needed to support large-volume toy manufacturing domestically. It also says it cannot easily raise prices because much of its business depends on large retailers with substantial pricing power.
The lawsuit goes further by pointing to the administration’s own prior legal arguments. In defending earlier tariffs imposed under the International Emergency Economic Powers Act, the administration had argued that Section 122 did not apply to the facts at hand. Now, after the Supreme Court struck down the IEEPA-based tariffs, the plaintiffs say the White House is turning to the very authority it previously described as inapplicable.
The suit also challenges how the tariff is being applied. Section 122 requires tariffs to be imposed uniformly, with only limited exceptions. But the businesses argue that current carve-outs for certain countries or goods reflect policy choices rather than the narrow exceptions permitted under the statute.
This new lawsuit closely echoes a separate legal challenge filed by more than 20 US states just days earlier. Together, the cases resemble the early stages of the legal campaign that eventually led to the invalidation of the earlier IEEPA tariffs.
If the courts ultimately agree, the administration’s effort to rebuild its tariff policy on a new legal foundation could once again be thrown into doubt.
