Burlap & Barrel’s challenge to the Trump administration’s tariffs has reached a critical stage at the US Court of International Trade, but the outcome could ripple far beyond one spice company, shaping how tariffs are imposed, challenged and ultimately paid across the entire US food industry.
The company partnered with the nonprofit Liberty Justice Center to sue the US government, arguing in court this month that the administration’s use of Section 122 of the Trade Act of 1974 to impose global tariffs represents an illegal overreach of executive authority.
In March, Burlap & Barrel said the tariffs substantially strained its operations, but it decided against raising prices for customers or paying farmers less to offset costs – a decision that has made the financial impact more pressing.
From filing to trial in weeks
The case, The State of Oregon et al v. Trump et al, Burlap and Barrel, Inc. et al v. Trump et al, was heard by a three‑judge panel in the Court of International Trade. The court typically handles a limited number of niche trade cases each year.
Burlap & Barrel’s lawsuit was combined with a parallel lawsuit brought by 24 states for a single hearing that addressed both state‑level and small‑business concerns surrounding tariff impacts.
The fact that we get to sue the government and the government needs to show up and defend itself… is really a meaningful moment of watching the American justice system at work
Ori Zohar, Co-founder, Burlap & Barrel
The case was heard just weeks after it was filed, which is “really, really fast,” and a signal they are taking the case seriously, according to Burlap & Barrel’s Co-founder Ori Zohar.
A dispute rooted in 1970s trade law
At the center of the case is Section 122 of the Trade Act of 1974, a statute that passed when the US was moving away from the gold standard and toward a system of floating exchange rates. To address the risk of significant dollar instability or balance-payment issues, Section 122 allows – but tightly limits – the presidents’ authority to impose temporary tariffs under narrow economic circumstances.
Burlap & Barrel’s argument, Zohar said, is that those circumstances no longer exist.
“Congress made a very narrow set of circumstances under which the President can enact tariffs, which is a right that’s held by Congress based on the Constitution,” he said.
The administration’s position is that the president can independently determine when economic conditions justify tariffs under Section 122, Zohar explained. Burlap & Barrel and the Liberty Justice Center argue the opposite – where Section 122 was intentionally narrow and tied to specific monetary conditions during the 1970s transition away from the gold standard, and cannot be treated as a broad emergency measure like IEEPA (International Emergency Economic Powers Act).
“Today, when the dollar is no longer attached to the gold standard, those set of circumstances both don’t exist and can’t exist,” Zohar said.
The judges focused heavily on whether Section 122 should be interpreted narrowly or broadly, repeatedly questioning how Congress intended the statute to function more than 50 years after it was enacted, he explained.
Operational strain without price increases
Burlap & Barrel chose not to respond to the tariffs by raising prices or shrinking packaging yet similar decisions have intensified pressure on small businesses as well, Zohar said.
“This is putting real stress on the food industry, and many companies are passing prices forward to customers. … Burlap & Barrel is not doing any of these things, but this is really turning up the heat on small food makers in the US,” he said.
Zohar added that many small companies lack the legal resources to challenge federal trade policy, making Burlap & Barrel’s partnership with the Liberty Justice Center essential.
“Litigating a case like this … will cost millions of dollars in legal fees, and so that’s why we’re also grateful for the Liberty Justice Center for being our partner on this,” he said.
Awaiting a ruling – and likely appeals
“We’re expecting to hear from this court imminently,” Zohar said.
Regardless of the outcome, Burlap & Barrel anticipates an appeal from the federal government that could take the case to the US Federal Circuit Court in Washington, DC.
“In a similar way as what’s happening right now with IEEPA tariffs, where they went all the way up to the Supreme Court, they were ruled illegal, and then that kicked off a refund process,” he noted.
“This is purely about the law. And if we win, the law gets undone, and if we lose, then the law continues,” Zohar said.
Even if the 150‑day tariffs expire, a court ruling declaring them illegal could still require the government to issue refunds to companies that paid them – a win Zohar said could materially affect the broader food industry.
A rare moment for small business
Beyond the legal stakes, Zohar described the experience as a meaningful demonstration of institutional checks and balances.
“The fact that we get to sue the government and the government needs to show up and defend itself … is really a meaningful moment of watching the American justice system at work,” he said.
As the case continues, Burlap & Barrel expects additional milestones ahead, including potential appeals and further court decisions later this year.
