On the very day the administration's Section 301 forced labor tariffs took effect — July 24, 2026 — two separate lawsuits landed at the Court of International Trade seeking to invalidate them entirely. If you're paying 10-12.5% on imports from 60 countries right now, your refund clock may already be ticking. Here's what you need to know.
The Liberty Justice Center has a perfect record against this administration's tariffs. They took the IEEPA tariffs to the Supreme Court and won in February. They challenged the Section 122 replacement tariffs at the Court of International Trade and won in May. Now they're back for round three — and they brought a class action.
On July 24, 2026, hours after the new Section 301 forced labor tariffs went live, two lawsuits hit the docket at the U.S. Court of International Trade. One is a proposed class action filed by the Liberty Justice Center on behalf of spice importer Burlap & Barrel and watch retailer Collective Horology. The other was filed by Learning Resources, hand2mind, and several HMTX-related companies — the same plaintiffs who won the landmark IEEPA case at the Supreme Court.
Both lawsuits make the same core argument: USTR didn't follow the rules Congress wrote into Section 301, and these tariffs should be vacated.
What the Section 301 Forced Labor Tariffs Actually Do
Before we dig into the legal fight, here's what's at stake. Effective July 24, 2026, USTR imposed additional duties on goods from 60 trading partners that allegedly fail to prohibit or enforce bans on imports made with forced labor. The tariffs apply on top of existing Most-Favored-Nation (MFN) duties and any applicable AD/CVD orders.
The rate structure breaks down into tiers:
| Tier | Rate | Countries |
|---|---|---|
| Capped economies | 10% (net of MFN) | EU, Taiwan |
| Capped economies | 12.5% (net of MFN) | Japan, Korea, Switzerland |
| Standard | 10% | Argentina, Bangladesh, Cambodia, India, Indonesia, Malaysia, Pakistan, Sri Lanka, UK, and others |
| Standard | 12.5% | China, Vietnam, Brazil, Australia, Singapore, Thailand, Philippines, and others |
That's 60 countries covering the vast majority of U.S. import volume. The "capped" tier means the combined MFN + Section 301 rate doesn't exceed 10% or 12.5% — a meaningful distinction for countries with higher existing MFN rates.
The Exemptions You Need to Check
Not everything is covered. USTR expanded the final exemption list by 471 additional HTS subheadings following public comment, and the carve-outs are significant:
- USMCA goods — Imports entering duty-free under the USMCA (Canada and Mexico) are fully exempt
- CAFTA-DR textiles — Textile and apparel goods from six Central American and Caribbean nations are exempt
- Section 232 products — Goods already subject to steel and aluminum tariffs don't get stacked
- Raw materials with insufficient domestic supply
- Products that cannot be sourced domestically in sufficient quantities
- Patented pharmaceuticals — Covered under HTSUS headings 9903.04.60–9903.04.66, with a delayed effective date of July 31, 2026
The key HTS provisions to know: 9903.05.85 covers the in-transit exception (goods loaded before July 24, entered before July 28). 9903.05.86 and 9903.05.87 reference the product-specific exemption lists in U.S. Note 52.
Exemptions are product/HTS-code specific — there is no blanket exemption by industry. You must verify each SKU against the Federal Register annex.
Why the Lawsuits Matter: The Legal Arguments
The plaintiffs aren't arguing that forced labor tariffs are bad policy. They're arguing the administration broke the law getting here. The arguments fall into three buckets:
1. USTR didn't satisfy Section 301's procedural requirements
Section 301 requires USTR to make specific, country-by-country determinations that a trade practice is actionable before imposing tariffs. The plaintiffs allege USTR conducted a single blanket investigation of 60 countries simultaneously — a process the Supreme Court described as requiring "demanding procedural prerequisites" in its February 2026 IEEPA ruling.
2. The timeline was impossibly compressed
USTR published its final determination on July 23, 2026 — just seven days after the public comment period closed on July 16. The Learning Resources complaint calls this "preordained," arguing no genuine analysis of comments occurred in that window. For context: USTR solicited comments through April 15, held a public hearing May 5-8, proposed tariffs June 2, took additional comments through July 16, and finalized everything in one week.
3. This is the same global tariff regime under a third statute
The complaint states plainly: the administration has "tried to re-create materially the same global tariff regime" under three different laws — first IEEPA (struck down by the Supreme Court, February 2026), then Section 122 (struck down by the CIT, May 2026), now Section 301. The plaintiffs argue using Section 301 as a "last resort" reveals it was never the appropriate authority.
The Liberty Justice Center's Track Record
This isn't some long-shot legal theory. The Liberty Justice Center has systematically dismantled this administration's tariff authorities:
| Case | Statute Challenged | Court | Outcome |
|---|---|---|---|
| V.O.S. Selections v. Trump | IEEPA | Supreme Court | Tariffs struck down (Feb 20, 2026) |
| Burlap & Barrel v. Trump | Section 122 | Court of International Trade | Tariffs struck down (May 7, 2026) |
| Burlap & Barrel v. Greer | Section 301 | Court of International Trade | Pending (filed July 24, 2026) |
Sara Albrecht, Chairman and CEO of the Liberty Justice Center, framed it directly: "The administration allowed one global tariff to expire and immediately replaced it with another under a different statute. Changing the statute doesn't change the law."
The Class Action Angle — Why This Could Affect Every Importer
Here's what makes the Burlap & Barrel case different from previous challenges: it's a proposed class action. The class is defined as all importers of record that have paid, or will be required to pay, duties under the Section 301 forced labor tariffs on merchandise entered on or after July 24, 2026.
If the court certifies the class and the plaintiffs prevail on the merits, the ruling would block the tariffs for virtually all importers — not just the named plaintiffs. That means potential refunds with interest for every duty payment made under this action.
The complaint asks the court to:
- Declare the Section 301 tariffs unlawful and vacate them
- Prevent their enforcement
- Order refunds of tariffs already paid, with interest
- Award attorneys' fees under the Equal Access to Justice Act
What This Means for Your Business Right Now
The tariffs are currently in effect. You must pay them. But how you handle this period could determine whether you're positioned for refunds later.
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Pay under protest — File your entries noting the tariffs are subject to pending litigation. This preserves your refund rights if the court rules in importers' favor.
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Track every dollar — Document all Section 301 forced labor duties paid separately from other tariff obligations. If refunds come, you'll need clean records showing exactly what you paid under HTSUS 9903.05.xx provisions.
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Verify your exemptions — The 471 additional HTS subheadings added to the exemption list after public comment mean many importers are paying duties they don't owe. Cross-reference every product against the Federal Register annex.
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Check FTZ status — Goods with Privileged Foreign Status (19 C.F.R. 146.41) lock in the tariff rate at time of admission. If you have inventory in a Foreign Trade Zone, the timing of admission matters.
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Monitor the docket — The Court of International Trade moves faster than most federal courts on trade cases. The Section 122 challenge went from filing to judgment in under three months.
What Happens Next
The Court of International Trade will first decide whether to certify the class in Burlap & Barrel v. Greer. Class certification alone would be significant — it signals the court believes the claims have merit and that individual adjudication is impractical given the number of affected importers.
On the merits, expect the government to argue that USTR's forced labor investigation was a legitimate exercise of Section 301 authority, distinct from the blanket IEEPA and Section 122 approaches. The plaintiffs will counter that investigating 60 countries simultaneously for the same alleged practice — and finalizing tariffs seven days after comments closed — proves the determination was preordained.
The pharmaceutical exemption taking effect July 31 adds another wrinkle: it suggests USTR itself recognized the tariffs needed narrowing, potentially undermining the argument that the original determination was thorough.
Watch for a preliminary injunction motion. If the court grants one, duties would stop accruing while the case proceeds — creating immediate cash flow relief for importers.
The Bigger Picture
We're watching the third legal challenge to global tariffs in six months. The pattern is unmistakable: each time a court strikes down one authority, the administration pivots to another statute. Each time, the same importers file suit arguing the procedural requirements weren't met. And each time, the courts have agreed.
Section 301 is a more defensible legal foundation than IEEPA or Section 122 — it was designed for exactly this kind of trade action. But its procedural requirements are also more demanding. The speed of this investigation — from initiation in March to final tariffs in July, covering 60 countries — will be the central question.
For customs brokers and importers, the practical advice is straightforward: comply now, document everything, and watch the Court of International Trade. If history is any guide, this litigation will move fast — and the stakes are measured in billions.
TariffLens tracks all Section 301 forced labor tariff classifications and exemptions in real time, so you can verify coverage and flag potential refund-eligible entries as the litigation develops.
This article is for informational purposes only and does not constitute legal, tax, or customs advice. Consult a licensed customs broker or trade attorney for guidance specific to your situation.