A Watch Retailer Is Suing Over the New Tariffs — and Three Other Cases Are Running Alongside It

Meta description: California retailer Collective Horology filed suit the day the Section 301 duties took effect. Twenty-five states followed on August 3. What the litigation means for watch pricing.

Three weeks ago we covered the tariff regime that changed on July 24, when the temporary Section 122 surcharge expired and new Section 301 forced-labor duties took effect the same minute. The story has moved since. It is now in court — with a watch business as one of the named plaintiffs.

The watch industry files suit

On July 24, the same day the new duties took effect, the Liberty Justice Center filed in the U.S. Court of International Trade on behalf of two small businesses: Burlap & Barrel, a New York spice importer, and Collective Horology, a California retailer and distributor that brings independent watchmakers' work to American collectors.

Collective's co-founder Asher Rapkin laid out the commercial position plainly. Since April 2025 the company has absorbed successive rounds of duties — first IEEPA, then Section 122, now Section 301. It is still owed six figures in IEEPA refunds. It has paid tens of thousands more under the two subsequent regimes. The effect, he said, has been a drain on the cash flow and operating capital a small business needs to run day to day, and forced price increases that nobody in the industry wanted — not dealers, not collectors, not the watchmakers themselves.

Notably, Rapkin has been careful to separate the legal argument from the underlying policy goal, stating that no one in the case is arguing forced labor is not a real problem. The claim is procedural: that USTR applied a near-uniform tariff across nearly every U.S. trading partner without doing the country-by-country analysis the statute requires.

Then twenty-five states joined in

On August 3, attorneys general from twenty-five states filed their own complaint in the same court, co-led by Oregon, Arizona and California. The case is State of Oregon v. Trump.

Their argument is blunter. The states contend the forced-labor rationale is a pretext, and that this is the same global duty the government has now attempted to impose under three different statutes in under a year. They point to the timing — duties taking effect the day the previous surcharge lapsed — and to public statements from trade officials promising continuity at the same rates, as evidence that continuity of the tariff, not remediation of forced labor, was the object.

They also point to the schedule. USTR completed sixty country investigations in roughly two and a half months, against Section 301 investigations that have historically run a year or more. The states argue that Section 301 permits action only after investigating a specific country's practices and requires any resulting tariff to be tailored to ending that conduct — whereas the actual rates grouped sixty economies into four categories with only 2.5 percentage points separating the two main tiers, and set no benchmarks a country could meet to have duties lifted.

The states are asking the court to declare the tariffs unlawful, halt collection, and order refunds of duties already paid.

At least two other challenges preceded or accompanied these, including a proposed class action covering importers of record who have paid Section 301 duties on goods entered on or after July 24.

Why this is not just legal noise

Because the same thing has already happened twice, and both times it moved real money.

The Supreme Court struck down the IEEPA tariffs in February 2026, opening a refund pool reported in the region of $166 billion. In May, the Court of International Trade held the Section 122 surcharge unlawful too — though relief was limited to the named plaintiffs and the Federal Circuit stayed the order, so collection continued nationwide pending appeal.

That is a two-for-two record for challengers at the trial-court level. It does not guarantee a third result, and Section 301 is generally regarded as more legally durable than either IEEPA or Section 122 — it has survived scrutiny before, and the Federal Circuit has previously read USTR's authority to modify Section 301 actions fairly broadly. But the procedural arguments here are aimed squarely at how this particular action was conducted rather than at the statute itself, which is a different and narrower target.

What it changes for buyers right now

Almost nothing, and that is the important part.

CBP is still collecting the duties. Filing a lawsuit does not suspend anything; the Section 122 case is the illustrative example, where a court ruled the tariff unlawful and importers kept paying it for months afterward. Anyone budgeting for imports should model the current rates — for Swiss goods, a combined MFN-plus-301 ceiling of 12.5% — and treat any relief as upside rather than plan.

Retail prices will not move either way in the near term. Brands set 2026 pricing with these costs assumed, and they do not walk prices back when an input cost eases. A refund, if one ever arrives, goes to the importer of record. It does not reach the person buying at retail.

And watches already sitting in the United States remain outside the calculation entirely. Duty attaches when a watch crosses the border, not when it changes hands afterward — which is why domestic pre-owned inventory has been insulated from this entire year of legal turbulence.

The real cost is the uncertainty

The most telling remark in this whole story came not from a plaintiff but from Switzerland's top trade diplomat earlier in the summer: Swiss companies care about the rate, but they now care nearly as much about its predictability and stability.

Five different rates in twelve months, three statutes, four active lawsuits. For a small importer, the problem is not that duties are 12.5% rather than 10%. It is that no one can tell you what they will be in six months, which makes pricing, inventory planning and supplier contracts a matter of guesswork.

That cost lands hardest on exactly the businesses least able to absorb it — the small independent retailers and distributors who bring interesting watches to the American market. Collective Horology's complaint is, at bottom, about cash flow. That is a mundane thing to sue over, and a very real one.

This post reflects the position as of August 17, 2026. All four cases remain pending; we'll update as they progress.