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. ...