Section 301 and the Spice Man who Sued Trump Over Them

Jordan Schneider (0:00)

So why are we talking about tariffs again? Because didn't the Supreme Court back in February rule that the tariffs were all illegal? The Trump administration did not give up on tariffs.

Ethan Frisch (0:09)

Most spices don't grow in the US, you know, the classics like black pepper or cinnamon or vanilla. You just can't grow them here. I mean, not yet, you know, like maybe in 10 years, we'll have the climate for it, but we don't have the climate for it today.

Jordan Schneider (0:21)

China, China has a 12.5% tariff. China's probably the biggest forest labor problem in the world. It has a 12.5% tariff.

So do like two-thirds of the other countries, the big companies you would ordinarily expect to kind of be the lead plaintiffs on this sort of thing because they're paying billions of tariffs.

I've just been sitting on the sidelines.

Ethan Frisch (0:39)

Yeah, they just pulled the money directly out of our bank account, by the way. We don't even read it checked.

Jordan Schneider (0:43)

So you can't use the skills you haggle. You learn haggling over spices with CBP. Hey, you know, how about I give you 8% instead of 12.5?

Ethan Frisch (0:50)

You can't do 6 now, 6 later. No, you know.

ChinaTalks, people suing the US government over tariffs series continues. This last time, we brought you the grumpy toy maker. And today, we have Ethan Frisch, longtime friend of ChinaTalks and co-founder of Burlap & Barrel, the finest purveyor of spices in the land. Co-hosting today, as always, Peter Harrell. Ethan, welcome to ChinaTalk. Thanks for having me. Always happy to talk about suing the government.

Jordan Schneider (1:23)

So they are great spices, too.

Ethan Frisch (1:26)

Thanks. So Peter, why don't you catch us up from where we were with our learning resources CEO? What have the developments been and what just happened in court earlier?

Jordan Schneider (1:40)

So why are we talking about tariffs again? Because didn't the Supreme Court back in February rule that the tariffs were all illegal? So didn't they just go away, right?

That's why what I think most people would assume happened. But no, that is not what happened after the Supreme Court ruled back in February in a case brought by learning resources, which is an educational toy importer that Trump's first round of tariffs, which he had imposed last year under a statute known as IEPA, which is an emergency powers statute, were illegal. The Trump administration did not give up on tariffs. Instead, what they have done is undertaken a two-part set of fallback tariffs, the first of which were in place for 150 days, which are also still being litigated even though those are now done. That was under something called Section 122 of the Trade Act of 1974 Then the tariffs that are in place today, if you are importing something from Cambodia or Vietnam or Japan or the European Union, tariffs that are in place today are under something called Section 301 of the Trade Act of 1974

Back in July, the US Trade Representative, pursuant to an investigation into alleged unfair trade practices related to forced labor, which we can unpack by almost all of America's trading partners imposed 10% or 12.5% tariffs on most US imports. Those tariffs are being challenged in court by several different groups of plaintiffs, but front and center of them is Ethan and his company, Burlap & Barrel, essentially arguing the tariffs that Trump imposed pursuant to the Section 301 of the Trade Act of 1974 did not follow the procedures required by the act and also that even if they did follow the procedures, they are too broad to be lawful. There was a trial court level hearing yesterday in New York City before the Court of International Trade, where I would say the government faced some tough questions. Both sides faced tough questioning, but government in particular, I think, faced some tough questioning about whether the Section 301 actually authorizes the kind of sweeping scope of the tariffs that are in place today.

Ethan Frisch (4:07)

It takes us all the way back to the global war on terror. Ethan, how did your time in Afghanistan start you down this? Yeah, intro, we are also a plaintiff in the 122 suit, so this is our second time suing the government over the second round of tariffs, which just can't get enough of it. You just can't get enough. Exactly. Well, there's a lot of money that's owed back to companies, including mine, and it's very suspicious that the second tariff started the same day that the 122 ended. Anyway, there's a lot of funny business around this, but my journey to the courtroom, so to speak, yesterday started in 2012 I was an aid worker. I had been a line cook and a pastry chef in New York City, and then went to grad school to become an aid worker for international development, and wound up working in Afghanistan. I lived there for over two years working mostly for the Aga Khan Foundation. I was working on infrastructure projects, mostly school construction projects in very remote rural mountainous areas across the northeast of the country. Part of the country that also happens to be known for its wild cumin. Having worked in restaurants before that, gone to little markets or meeting people as I was traveling around northern Afghanistan tasting this cumin was really blown away by the flavor and the quality and started bringing it home, not initially as a business just because I loved it so much and was so excited to come across this really interesting and different ingredient. I worked at a high-end Indian restaurant here in New York and anyway, I knew my way around the spice cabinet and then it turned out that there were so many more interesting and different spices all around the world that had not made their way to the US market before. So that was the very beginning of it. I started bringing cumin home from Afghanistan in duffel bags, sharing it with friends in the restaurant industry, realizing that people might actually pay for something like this and then maybe there would be other producers in other countries. So I started to put the pieces together. Now, so we started the company in 2016 My co-founder Ori and I, we started it out of my one bedroom apartment in Queens. No money, no experience, truly no idea what I was doing at all. Driving out to the airport at two in the morning to pick up air freight shipments, haggling with the customs officers because I didn't have any of the paperwork or anything, but slowly figuring things out.