ChinaTalk’s people-suing-the-US-government-over-tariffs series continues. Last time we brought you the grumpy toymaker. Today we have Ethan Frisch, longtime friend of ChinaTalk and co-founder of Burlap & Barrel, finest purveyor of spices in the land. Co-hosting, as always, is Peter Harrell.
We discuss:
How an aid worker hauling wild cumin out of Afghanistan in duffel bags built a single-origin spice company, and why Burlap & Barrel chooses farmer-led pricing.
What Trump’s tariffs cost small businesses and why they’re suing the government, while the large ones sit on the sidelines.
The legal case against Section 301 of the Trade Act of 1974, arguing against executive overreach.
Whether forced labor is a real justification or a pretext for recreating the tariffs the Supreme Court struck down, and how long the appeals will run.
Plus, the most underappreciated spices, the virtues of a pre-capitalist trading model, and a call to buy small!
Burlap & Barrel promo code: CHINATALK for a free jar of your choice on a first-time order over $15.
Listen now on your favorite podcast app.
Where the Tariff Litigation Stands
Jordan Schneider: Peter, catch us up from where we left off with the Learning Resources CEO. What have the developments been?
Peter Harrell: So why are we talking about tariffs again? Didn’t the Supreme Court rule in February that the tariffs were illegal, so they just went away? That’s what most people would assume. But that is not what happened.
After the Supreme Court ruled in February, in a case brought by Learning Resources, an educational toy company, that Trump’s first round of tariffs — imposed last year under IEEPA, an emergency powers statute — were illegal, the administration did not give up on tariffs. Instead, they undertook a two-part set of fallback tariffs. The first were in place for 150 days under Section 122 of the Trade Act of 1974. Those are now expired, but still being litigated. The tariffs in place today — if you’re importing from Cambodia, Vietnam, Japan, or the European Union — are under Section 301 of the Trade Act of 1974.
In July, the US Trade Representative, pursuant to an investigation into alleged unfair trade practices related to forced labor 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 groups of plaintiffs, but front and center is Ethan and his company, Burlap & Barrel. They argue that the Section 301 tariffs did not follow the procedures required by the statute, and that even if they did, they are too broad to be lawful. There was a trial-level hearing yesterday in New York before the Court of International Trade. Both sides faced tough questioning, but the government in particular faced tough questions about whether Section 301 actually authorizes tariffs of this sweeping scope.
Ethan Frisch: We are also a plaintiff in the 122 suit, so this is our second time suing the government.
Jordan Schneider: You just can’t get enough.
Ethan Frisch: There’s a lot of money owed back to companies including mine, and it’s very suspicious that the second tariff started the same day the 122 tariff ended. There’s a lot of funny business around this.
Burlap & Barrel’s Origin Story
Jordan Schneider: Take us all the way back to the global war on terror. How did your time in Afghanistan start you down this road?
Ethan Frisch: My journey to the courtroom started in 2008. I had been a line cook and a pastry chef in New York City, then went to grad school to become an aid worker in international development, and wound up in Afghanistan. I lived there for over two years, working mostly for the Aga Khan Foundation on infrastructure projects — mostly school construction in very remote, rural, mountainous areas across the northeast of the country. That part of the country happens to be known for its wild cumin.
Having worked in restaurants, going to little markets and meeting people as I traveled around northern Afghanistan, I was blown away by the flavor and quality of this cumin and started bringing it home. Not as a business initially, just because I loved it. I had worked at a high-end Indian restaurant in New York and thought I knew my way around the spice cabinet. It turned out there were so many more interesting spices around the world that had never made their way to the US market.
I started bringing cumin home in duffel bags and sharing it with friends in the restaurant industry, realized people might actually pay for something like this, and that there might be other producers in other countries. We started the company in 2016. My co-founder Ori and I started it out of my one-bedroom apartment in Queens: no money, no experience, truly no idea what I was doing. Driving out to the airport at two in the morning to pick up air freight shipments, haggling with customs officers because I didn’t have any of the paperwork, slowly figuring things out.
Peter Harrell: When did you pay your first tariff bill?
Ethan Frisch: It was a while. Some spices have been tariffed for a long time, predating either Trump administration — garlic, for example. But most spices are duty-free, because you’re not competing with any domestic production. We’ve paid tariffs on garlic from Vietnam because there’s a garlic industry in California. Maybe 2019 we paid our first garlic tariff, on our first shipment of purple-stripe garlic powder from Vietnam.
Generally, I was carrying things home. I did a lot of traveling in the early days with empty suitcases on the way there and full suitcases on the way home, and always declared everything, totally above board. Because spices are duty-free, I was waved through. That’s how I did my importing for at least the first year.
Jordan Schneider: You show up at TSA with this purple dust and they’re like, okay, cool?
Ethan Frisch: These were decent quantities. I would bring two huge empty duffel bags to bring home a hundred pounds of cardamom or a hundred pounds of nutmeg. In the early days it was often cheaper to buy a plane ticket than to ship those quantities. I’d show up, unzip my duffel at the counter, declare it, file a prior notice — there’s always a little paperwork. They were often very confused about what I was doing and why. Sometimes they’d open it up and look at it. Sometimes it was just, okay, fine.
Jordan Schneider: Would they ever make you taste it?
Ethan Frisch: No, they never made me taste it. It’s all legal. You can bring spices from all around the world; they’re not protected. My tip is to make sure the label says “spices” and not “seeds.” If it says seeds, you’re in a whole different category. A cumin seed is a seed, but it’s also a spice. Unlike meat or dairy or fresh fruit, you’re allowed to bring spices in.
What Makes a Better Spice
Jordan Schneider: Peter, as a home cook who’s been playing with Ethan’s stuff for the past few weeks, how different is it from what you get in a supermarket?
Peter Harrell: Ethan brings in great spices. We’re really going to do product placement here: I have a whole set of Burlap & Barrel spices. Compared to the McCormick stuff you’d buy at your local supermarket, you get a fuller flavor. Sometimes the profile is different, but mostly it’s fuller. The stuff you typically buy tastes muted by comparison, whereas this has a lot more complexity and roundness.
Ethan Frisch: You see this in produce. A waxy Red Delicious from the supermarket versus an orchard apple; there’s a huge range of quality. The same is absolutely true for spices, but nobody had invested in that as a business before. What we do is find farmers who are growing something different: a different species or variety, or something different in the agricultural process, often with a focus on soil health and biodiversity. You can taste that difference. Not to mention it’s a lot fresher. We bring shipments in several times a year and turn our whole warehouse over annually, so everything we sell is from the freshest harvest, versus a supermarket spice that’s already three years old by the time you buy it.
Jordan Schneider: Coming back to the tariff discussion: you’re not getting the wild cumin anywhere else. The substitute didn’t exist before you existed. The consumer isn’t going to be able to support American garlic instead.
Ethan Frisch: Most spices don’t grow in the US. The classics — black pepper, cinnamon, vanilla — you just can’t grow here. Not yet; maybe in ten years we’ll have the climate for it. There’s also the long history of growing a particular crop in a particular place. The farmers we work with have been doing this for decades, or generations. You can’t just build a cinnamon farm and try to replicate that experience. It doesn’t work.
Peter Harrell: How many countries will you be importing spices from this year, 2026?
Ethan Frisch: About 28.
Jordan Schneider: Before you came across these farmers, were they just serving the local market?
Ethan Frisch: Mostly selling into the local market, where there was real appreciation for quality and flavor, or into the commodity market, because that’s where they could get volume. Some were organic-certified, which gave them a little access. But mostly they were small-scale producers selling to their neighbors or within their local area. Some had exported before: our royal cinnamon partners in Vietnam export to Taiwan and Korea as a medicinal ingredient. In other cases their yields were very small because there wasn’t much demand. In Zanzibar, where we buy black pepper, the farmers’ co-op we work with has scaled up yields by probably 10x. They were harvesting a few hundred kilos when we started; now we buy at least five tons a year from them. By creating market access, we’ve given them the opportunity to scale up production they might not otherwise have invested in.
Peter Harrell: How do you find your suppliers? Are you trekking around the highlands of Vietnam, getting off the minibus in Zanzibar and saying, hi, I’m here?
Ethan Frisch: Less so now that we have long-term relationships in place, but in the early years, absolutely. That’s how we met the royal cinnamon supplier. We got out of a car in a little city in central Vietnam, smelled cinnamon, and walked up the street asking where the smell was coming from. Literally. We found a little workshop where they were peeling and cleaning cinnamon, hopped in the car, and they drove us up into the mountains to the farms. We’ve been working with them ever since. That’s our best-selling product.
We also find farmers on social media, especially if there’s a particular product we’re looking for. A lot of digging on the internet. And we have a lot of farmers reaching out to us: I grow turmeric in India, I grow this or that. Sometimes we wind up working with those people. The key is ultimately the personality of the farmer at the other end. Often they’ve already had the idea: if only I could find a direct customer in the US, I’d make more money. The best relationships are the ones where we show up on the farm, and they say, what the hell took you so long? I had this idea a long time ago. Let’s make it happen.
We’re often asking them to do more work than they would selling into the local or commodity market, where they just hand off the product. Working with us, they take on the export process themselves: government paperwork, logistics, getting the product to port, packing, food safety testing. We support them through all of it, but they have to do it. A farmer with a little entrepreneurial drive — those are the best relationships.
What Americans Will Buy
Jordan Schneider: How far can you push it? How weird is too weird?
Ethan Frisch: I’m very jaded about what American consumers are interested in. We sell a huge amount of cinnamon. That’s our number one bestseller by a significant margin. After that: black pepper, chili flakes, paprika, garlic powder. Americans generally haven’t had much exposure to spices and often consider them intimidating. There are notions of foreignness; spices represent a lot beyond the literal object, which connects to this tariff conversation and even to the culture war. It’s challenging to get Americans to pick up new spices. We’ve found ways around that, developing blends that are accessible but also different and interesting. But mostly people buy things they already know, and what we provide is a better, different version. You’ve had cinnamon before, but you haven’t had the species we import — we’re the only company that imports it — so you taste the difference right away. For a good cook, that’s a breakthrough: a new and better version of an ingredient you’ve worked with your whole life.
Peter Harrell: What spices should Americans try more of? What do we underappreciate?
Ethan Frisch: Everything. Whole spices in general, people seem intimidated by, but they’re very accessible whether you grind them or not. I cook with a lot of black pepper. That’s an easy way to use more spices: just add more black pepper to everything. Really use it as a seasoning; it brings heat and brightness. Personally, I love tart spices: sumac, which we get from Turkey, or black lime. They’re dry, so you cook with them differently, but with similar applications to lemon juice or lime juice or vinegar. In powder form, you can use them in marinades. Great on seafood, dips, roasted vegetables.
Jordan Schneider: Can we shout out any Chinese flavors you supply? Do you buy anything from China?
Ethan Frisch: We don’t import anything from China itself. We import a five-spice blend from Vietnam, a different take on a familiar profile, very heavy on the star anise, which I appreciate. One cool thing about Chinese cooking is that the understanding of spices is inverted. In the US, we consider cinnamon a sweet spice; in China, and most of Asia, it’s a meat spice. The idea of a cinnamon bun is an association someone might have with beef. A funny little twist.
We import a couple of cousins of the Sichuan peppercorn. From Nepal we get timur pepper, which is very citrusy, not as tingly as classic Sichuan pepper. From Vietnam we get mắc khén pepper, very bright, lime-zesty, and tingly. The peppercorn flavor people know is actually a genus, with several species that have similar flavors and numbing effects.
Jordan Schneider: What’s the sales breakdown between commercial and consumer?
Ethan Frisch: We’re primarily an online retailer selling direct to consumer through our website, burlapandbarrel.com. About 70% is direct through our own site. We do some business on Amazon, sell to a lot of grocery stores and restaurants, and to artisan manufacturers: chocolate makers, bakeries, jam makers. But the bulk is direct to consumer. We’ll probably do close to 150,000 orders this year, to home cooks across the country buying a few jars at a time.
Jordan Schneider: This is not a sponsored show, but we did get Ethan to put together a promo code.
Ethan Frisch: Code CHINATALK: a free jar of your choice on a first-time order over fifteen bucks.
Liberation Day and Suing the President
Jordan Schneider: April 2025. You wake up one day and your business changes. What was Liberation Day like for you and your team?
Ethan Frisch: I love any conversation about supply chains. Anything that reminds an American consumer that everything we touch and eat and interact with daily has to be imported. This is my issue. We’re a single-origin spice company, which means we’ve made intentional decisions about where things come from, and we do all this work to set farmers up to export their own crops. That’s a challenging marketing message. So any time current events remind people of the challenges of supply chains and how they can be better, I’m into it.
We saw pretty quickly that the financial impact on our business was going to be less compared to importers of finished goods like an iPhone, who pay the tariff on the finished product. We pay the tariff on a bulk product that then gets packed and blended, with a fair amount of additional work in the US. Within our unit economics, the cost of the spice itself is a small fraction of all the costs that go into getting a jar of cinnamon to somebody’s home.
So within a couple of days we made an announcement. Understanding we’d have some financial challenges from the tariffs and might need money to cover them, we announced a tariff sale and committed not to raise prices to consumers, which we have followed through on in the almost two years since, and not to cut payments to partner farmers or ask them to absorb the tariff. We’d cover those costs internally.
We saw a huge response. A social media post went viral, and we did about a quarter million dollars in sales in a very short period, because everybody was worked up about Liberation Day and looking for companies doing the right thing. We took advantage of the moment and turned it in our favor. I’ve been talking about supply chains ever since. I’m happy to have my issue in the news and the president talking about it.
Peter Harrell: What is the cost? You’d paid a few dollars in garlic tariffs before Liberation Day. How much are you paying now, and what has it meant for the business, especially since you’re eating all of it?
Ethan Frisch: I don’t know the exact numbers off the top of my head. The percentages changed, so it depended on the daily rate the day a shipment crossed the border. But generally it was between 10% and 20% on our bulk cost. We pay fifteen bucks a kilo or a little more in Zanzibar for black pepper, and we bring in maybe five to ten tons a year, so 10% on top of that adds up.
We got our IEEPA tariff refund back a few weeks ago. Low six figures. A nice chunk of change to receive.
Jordan Schneider: Whose name was on the check?
Ethan Frisch: I think it came from CBP. And it came with interest — three and a half percent, maybe. I’ll take it.
Those were real costs, and we’re a very cash-constrained business. We’re bootstrapped, with no outside investors, and we pay big deposits to farmers well in advance of receiving the product. Cash has been tight. That’s probably been the biggest impact: we’ve had to manage cash flow very carefully and had some tight moments in our bank account over the last year. But overall we’re growing. This is all in the context of increasing sales and increasing exposure for the company. I’m trying to stop the tariffs, of course. They’re illegal and an overreach. But it’s hard to be totally negative about them, because my business is doing really well in this context, it’s my issue in the news, and we’ve had these opportunities for press and to participate in these lawsuits.
Jordan Schneider: How are you balancing the “we’re not going to buy Ethan’s spices because he’s a woke lib” problem? Or were you already too woke-lib-coded for that to matter? How many Republicans buy wild cumin?
Ethan Frisch: Everybody cooks. Everybody can appreciate better flavors. When we filed the 122 lawsuit in May, we sent an email to our audience with a subject line like “We’re suing the president.” We hit that political message hard. We got almost exactly the same number of positive and negative emails back, something like a hundred each. It was almost identical numbers of people saying “yes, we’re behind you” and “screw you, we’re never ordering again.” Most of the negative responses were not active customers; it was a lot of posturing. Overall, business is up.
Other than that email and a couple of updates since, we’re not centering this in our marketing. We don’t really center any of it. We don’t talk much about our social enterprise or public benefit corporation status. We don’t even talk that much about our supply chains, because to your question about what American consumers are looking for: they don’t care. They don’t care about good supply chains. They don’t care about ethical sourcing. They don’t care about any of it. They just want to know the spice is going to taste good. That’s always the focus of our marketing. If somebody disagrees with our stance, there are other, worse spices they can buy. And our lawsuits are pro bono with the Liberty Justice Center, so your purchase isn’t funding the lawsuit. The lawsuit is happening regardless.
Jordan Schneider: How did you get involved with the lawsuit? The Learning Resources CEO told us his entire industry was terrified and no one wanted to step up, so it had to be a small, family-owned business with the attitude of, I don’t give a fuck, I see some upside in being the one to take this on. What was your calculus?
Ethan Frisch: There were three conversations. The first was right when the tariffs were announced on Liberation Day. We wanted to find a way to get involved, but we’d been contacted by a different libertarian pro bono law firm, and Ori and I had a lot of hesitation because of the distance between our politics and theirs, and concerns that we were being used. We didn’t know what we were doing. Peter, I think that was the first time you and I spoke about this, because we were trying to figure out how to engage without getting in over our heads. We didn’t pursue a lawsuit then, but we did file an amicus brief in the second round of IEEPA cases at the federal district court in DC. That put us on the radar of the Liberty Justice Center.
When the Section 122 tariffs were announced, they reached out and asked if we’d consider being a plaintiff. I was in India at the time, trying to get home from a sourcing trip in Kerala the day the Iran war kicked off. Ori was on the phone with Liberty Justice, and I was at the Mumbai airport desperately trying to figure out how to get home with all the flights canceled. Ori said, read this email, we should do this now. And we did.
The Liberty Justice Center has been great to work with. We may not agree with them on pretty much anything beyond this particular issue — they’re a libertarian, pro bono, activist law firm in Chicago — but I have a huge amount of respect for how they approach this. I had lunch with their chairperson and head of litigation yesterday after the hearing.
When the 301 tariffs were announced, we were not planning to be a plaintiff. We’d filed the 122 case, and that was enough. But they were struggling to find plaintiffs willing to take the risk. To be honest, I don’t understand what everybody is scared of. Yes, retaliation from the president or people close to him. But it has not happened in any of the tariff cases. That was one of the things we looked into. I discussed it with my wife: this is a risk; what do we think? We looked at how the president handled the IEEPA case. He said aggressive things about the plaintiffs in aggregate, but he didn’t call out any company or individual by name. That gave us some reassurance.
Also, we have no outside investors and total autonomy. Ori and I own 100% of the company. Nobody can tell us what to do, whereas other founders may have had more hoops to jump through with investors or board members. And over ten years we’ve made very good use of earned media, from the New York Times to Shark Tank, and that has really supported the growth of the business. We’re comfortable talking to the media and using that to promote the company and the issues we care about. So we felt well positioned to take advantage of the exposure that comes with a lawsuit like this.
The government could come after us. The IRS could audit us. We just went through an FDA audit, which we passed. I’m exaggerating a little; there has not been any retaliation or even a hint of it. And we won the Section 122 case. Based on how the hearing went yesterday, I’m not an expert, but it seems we’re likely to win at least this first round of the 301 suit as well.
Why the Big Companies Stay on the Sidelines
Peter Harrell: It’s been interesting over the last year and a half. You talk to major law firms in DC or New York, or to Fortune 500 companies, and they have been terrified to bring lawsuits challenging the tariffs, or as lawyers to take on clients who want to. They’re clearly afraid of retaliation. As a result, in all the lawsuits we’ve seen, it’s been either small businesses like Ethan and Ori or Learning Resources, or Democratic-led state governments: Oregon, New York, California. The big companies you’d expect to be lead plaintiffs, because they’re paying billions in tariffs, have been sitting on the sidelines.
What’s striking is that despite all this fear — and I was counsel of record for members of Congress filing amicus briefs in the IEEPA litigation, so I’ve been tracking it — it doesn’t look to me like the government is actually retaliating at all. Obviously they want to win in court. But I’ve seen no evidence that USTR, CBP, or the Department of Justice have been anything other than professional. Trump is going to say what Trump is going to say. That’s the world we’re in.
Jordan Schneider: What’s driving that? We’re going after Letitia James over her second mortgage. We’re taking away security clearances from random former Biden staffers now on the Hill. They can be a lot more petty, and they have been. Is it just that USTR is a functional organization as opposed to these other places?
Peter Harrell: It’s a great question, because we’ve definitely seen retaliation in other areas. It’s probably a combination. USTR and CBP are by and large quite professionally run, and respected on both sides of the aisle. And there may be some self-interest: if you’re actively involved in a lawsuit and the government seems to be coming down on a plaintiff, the judge is going to become aware of that. If you look at the DOJ lawyers litigating these cases, or the USTR and CBP lawyers involved, they’re professionals who don’t want to play games, who want to win on the merits and aren’t looking to make these political cases.
Ethan Frisch: The core argument that came up in both the 122 hearing and the 301 hearing yesterday was deference to the executive. Section 301 or 122 says this; here’s the text. But ultimately there’s a level of interpretation allowed to the executive branch. That came up several times. The government lawyer was essentially arguing, let us get away with this because we’re the executive branch. But the government’s case is just not that strong. Section 301 has never been used this way. It’s a targeted tariff aimed at a specific product or country, not a copy-and-paste reapplication of 122, which was itself a copy-and-paste of IEEPA. You can see pretty clearly that the administration is taking the same tariff structure and putting a different justification on it, one after another.
The Legal Case Against Section 301
Jordan Schneider: Peter, what’s your legal analysis of where we are, and where the next few years of tariff policy could go?
Peter Harrell: Congress passed Section 301 of the Trade Act of 1974 to give the executive branch a tool to negotiate over unfair trade practices by foreign governments. It’s been used something like 130 times. Unlike IEEPA, which had never been used for tariffs before last year, 301 has been used for tariffs quite a bit, notably as the basis for Trump’s first-term tariffs on China.
The way it’s being used this year is fundamentally different. In all past uses, USTR investigated a discrete set of unfair trade practices by one country, or by the EU as a customs union, found the practice unfair, and proposed tariffs as leverage to negotiate a resolution. In the 1980s there were 301 cases on Japanese semiconductors. In Trump’s first term, the 301 tariffs on China were about Chinese theft of US intellectual property, followed by an effort to negotiate a deal.
What the government is doing now is reinterpreting the statute to give itself a legal basis for essentially permanent tariffs on sixty jurisdictions, counting the EU as one, that account for 99% of US trade. Rather than a tool to investigate a country and negotiate, they’re trying to rewrite the tariff code wholesale. The conceptual argument against these tariffs is that this breadth is not allowed under the statute.
In court, you have to break that down into what the statute specifically required, procedurally or substantively, that the government failed to do. There was a lot of discussion yesterday about whether the government adequately investigated each of the sixty countries, since mostly they did a copy-and-paste job. Did they actually find that what each country does burdens US commerce?
There was also a lot of debate because Section 301 has specific provisions around forced labor. The government’s basis for these tariffs is that these sixty trading partners have failed to prohibit their own imports of products made with forced labor. It’s not that there’s forced labor in the European Union; it’s that the EU isn’t appropriately preventing forced-labor products from coming in. But the forced labor provisions in 301 are about what a country does domestically, not this third-country import issue. So can 301 be used for this kind of forced labor claim at all?
Basically, the plaintiffs’ lawyers were trying to take the conceptual argument — Congress clearly didn’t intend 301 to authorize a wholesale change in tariffs of unlimited duration at any amount, since the government’s view is that it can impose it at any amount — and break it down into specific requirements the government failed to meet. The government faced a number of skeptical questions. They’re arguing the statute doesn’t require as much detail as it has historically been viewed as requiring, that they can do a cut-and-paste job, and that the court should defer to the executive branch. The panel of three judges had tough questions for both sides, but was frankly somewhat skeptical of the government.
This is just the first step. After the Court of International Trade, there’s the Federal Circuit, the appellate court above it, and this will almost certainly go to the Supreme Court. Whatever happens at the Court of International Trade, we have a year to a year and a half of litigation ahead.
Forced Labor as Pretext
Ethan Frisch: China was the elephant in the room, the subtext behind a lot of the conversation. A lot of the forced-labor goods being imported into these other economies mentioned in the 301 come from China, which is a site of forced labor at scale more than other countries.
Jordan Schneider: Speaking of forced labor laws, we’re going to run an article on ChinaTalk soon. A Chinese manufacturer offered fifty jobs to a graduating class, and the day before they were going to start, told thirty of them: you’re either working on the line for half your pay or we’re firing you. And the students started reporting them under EU law. You think you’re so slick — just wait until we blow up all your export markets by exposing your forced labor. Ethan, do you encounter this at all?
Ethan Frisch: Sure, a little bit. The point is that forced labor is a real thing. Whatever you call it — forced, compulsory, slavery — it affects a lot of people and a lot of economies. For the government to use it as a throwaway justification for another round of the same tariffs really undermines the issue, which it would be great to have more dedicated focus on solving. Instead they’re using it as window dressing.
Jordan Schneider: Rubio was a co-sponsor of the Uyghur Forced Labor Prevention Act. I remember when it passed: we’re getting three hundred million dollars for forced labor enforcement and not a dollar for BIS. But I guess if it was just to put tariffs on European products...
Peter Harrell: There are a number of anomalies that show the forced labor justification is pretext for what the administration wants to do. First, the tariff rates and the exempted products largely track the tariffs the Supreme Court ruled illegal in February. It’s not like we’ve seen an extensive effort by the government to say, in Vietnam there’s a huge problem with forced-labor imports, in the EU it’s small, with differentiated rates. You see two rate levels: 10% if the country has a legal ban on forced-labor imports but fails to enforce it — and they found no country enforces the ban, so 10% is the minimum — and 12.5% if the country doesn’t have a ban. The rates don’t correlate with forced labor. China, probably the biggest forced labor problem in the world, has a 12.5% tariff, and so do about two-thirds of the other countries. No differentiation at all.
And there’s no secret that this is pretextual, because President Trump said on February 20th, the afternoon after losing the Supreme Court case: don’t worry, we have other authorities, we’re going to recreate the tariffs. The government hasn’t hidden that this is about maintaining the tariffs.
What Comes Next: Appeals, Refunds, and 2028
Peter Harrell: Even if Ethan wins at the Court of International Trade, it will be appealed up the line. Given the timeline we’ve seen in the other tariff litigation, probably twelve to eighteen months before this is fully resolved. And the other thing we’ve seen is that even if Ethan wins in the coming weeks or months, the government will be able to continue collecting the tariffs during the appeals. One area where the courts have been deferential to the government, even when ruling against it on the merits, is letting it keep collecting while appeals proceed. Unfortunately, Ethan, you’re going to be writing checks for a while. If and when you prevail at the Supreme Court, you’ll get a refund.
Ethan Frisch: They pull the money directly out of our bank account. We don’t even write a check. No opportunity to haggle. Direct debit from our account straight to CBP, as it is for everybody.
Peter Harrell: You can’t use the haggling skills you learned over spices. How about 8% instead of 12.5%? Six now, six later?
Jordan Schneider: This is like Annie Lowrey’s new book: the government is really efficient when it comes to taking your money, but Congress will throw plenty of things in the way of poor people getting their Medicare benefits.
Speaking of Democrats, Peter, where is the 2028 crop on tariffs? There was an initial vision that all this would go away. It might, if it all ends up being illegal. But Biden crossed the Rubicon a bit, and we may never go back.
Peter Harrell: In the policy circles I talk with, it’s underappreciated that the courts may find all of these country tariffs illegal. Not all tariffs — the steel tariffs are under a different authority — but the country tariffs. There’s a view in the policy community that whatever happens after Trump, the next president will inherit all these tariffs and may or may not modify them. That may be true, but it may also be true that a lot of this fails in court. That’s a big question overhanging the long term of US tariff policy that the courts, not the executive branch, will resolve.
If they’re all upheld: the Democratic Party is going to have a wide-open primary with thirty candidates, a real circus, which I think is good for the party.
Jordan Schneider: Does this mean you’re not running, Peter?
Peter Harrell: Heck no. No one wants my views on anything. I think the median Democrat will want to cut the tariffs. Biden did not cut Trump’s first-term tariffs at all. But the median Democratic next president, having presumably won on an affordability message, is going to say, I want to get rid of the tariffs on your spices and this kind of thing. They’ll probably want to keep some percentage as negotiating leverage or protection for US industry. Some decent chunk goes away, and some decent chunk sticks. Assuming the courts uphold it.
Jordan Schneider: Ethan, we met up at the Fancy Food Show in New York. Is the industry aware? Is McCormick thanking you for doing this?
Ethan Frisch: As Peter said, they’re all scared on the sidelines, letting the little guy take on the risk of retaliation. I have gotten a couple of thank-yous from bigger spice companies, not the one you mentioned. We made stickers — “Pay Farmers, Not Tariffs” — and gave them out at the Fancy Food Show at the Javits Center. We had maybe 500 printed and they were gone within the first two days.
Small business owners are really heads down at this point. The inflation and economic downturn we see in our direct-to-consumer interactions are a much bigger obstacle for small businesses. People don’t have that much money to spend on fun or discretionary food purchases, and consumers are being much more careful. And then the cost of the tariffs themselves. Most small businesses are focused on the micro numbers: how do I make sure I have enough margin to cover these tariff costs, and how do I make sure customers keep buying? The big companies are just baking it in, as they always have. They operate at scale, and the amount of cash moving through their system lets them weather these storms much more easily. My call to action is: buy small. Buy from small brands that really need the money, not from the big brands coasting off our litigation.
New Products and Farmer-Led Pricing
Jordan Schneider: Let’s close on something more fun than making payroll. What are some new products? You mentioned you’re getting into goops.
Ethan Frisch: Condiments, for sure. Spices are challenging to market in the US even under the best circumstances. It’s a small category in the grocery store, and not something people use in huge volumes. So we’ve been exploring adjacent pantry categories. Over the last few years, we’ve rolled out a line of single-origin sugars, inspired by the growth of the salt category over the past decade, from iodized supermarket salt to flake salt in lots of formats. We have a whole line of unrefined sugars with great flavors and textures: jaggery from India, panela from Colombia, coconut sugar from Indonesia.
We have a partnership with the Jane Goodall Institute, and with Dr. Jane Goodall herself before she passed. I believe this is the only consumer product she ever put her face and name on in her 96 years. It’s a line of wild-harvested honey from the woodlands of central Tanzania, one of the last remaining chimpanzee habitats in the world. With tight controls over how much and when they harvest, people who live in the woodlands can make a lot more money harvesting honey than through slash-and-burn agriculture, which is essentially the alternative. We launched those about a year ago and they’re doing great: really beautiful, intense flavors.
Pomegranate molasses from southeastern Turkey is another sweetener. It’s reduced pomegranate juice, an ancient sweetener. We work with a small factory that has figured out how to do it under pressure, so it’s essentially evaporated rather than boiled. It keeps a very bright, tangy flavor and a bright red color instead of turning dark and caramelized like traditional pomegranate molasses. Great on salads, in marinades, even in stews.
The other product line that’s been really successful has been the shift from selling individual spices like wild cumin, Zanzibar black pepper, or royal cinnamon toward blends. Since I’m jaded about what American consumers want, we created blends very similar to things people have already experienced: lemon pepper, cinnamon sugar, barbecue, steak seasoning, Cajun seasoning. They’re all made with the same spices we sell individually and the same supply chains, supporting the same farmers, just reformatted with a name consumers find more accessible. The everything bagel seasoning — I probably swore ten years ago I’d never make one. But we need a great everything bagel seasoning. We sourced the granulated garlic specifically, and heirloom sesame seeds from Turkey, and put a lot of black pepper in it. It’s spicy, peppery, with some cumin, and a lot of texture.
Jordan Schneider: Can we close on a little bleeding-heart stuff? What premium do farmers get when they start selling to you, and how have you seen lives change?
Ethan Frisch: I don’t track the commodity price that closely. We pay farmers whatever they ask. We call it farmer-led pricing. We don’t negotiate, because the cost of the spice is a very small percentage of our total unit cost. An extra dollar a kilo has almost no visible impact on our bottom line but a huge impact on somebody’s day-to-day life. A longtime partner cardamom farmer in Guatemala built a new two-story house with running water, which he’d never had before.
Jordan Schneider: How does farmer-led pricing work? Has no one ever given you a number where you said, no thank you?
Ethan Frisch: Not never, but almost all the time we’re able to pay the price they ask. Sometimes we go back and forth to show how it works out in our costs. Our biggest cost is actually shipping from our warehouse to your home. We encourage farmers to ask for the amount they need to run a sustainable business. In most of these relationships, we have a very frank conversation where we break down our business model and cost structure: here’s what it costs to ship to our warehouse, here’s what it costs to put it in a jar. Then we do the same exercise for them: what labor are they hiring through the season, what inputs, what equipment. A number usually emerges pretty clearly that works for them and for us, and it’s a long-term partnership.
Jordan Schneider: Is this a normal thing? Do lots of people do this?
Ethan Frisch: No, nobody does this. It’s an anti-capitalist, or pre-capitalist, approach to trade. It’s not really about the dollar amount. We’re not comparing this supplier to that supplier or switching things around to save a few pennies. We’re invested in long-term relationships with individuals whose product is unique. What we bring is logistics and market access; what they bring is deep expertise in this particular thing. We live in a capitalist paradigm and have to speak that language, but we don’t have to bring it into our relationships. We can work with people as individuals, with real trust and friendship underpinning the relationship. If they need to charge a little more this year, maybe a little less next year. The money is secondary to the relationship.
Jordan Schneider: Has Zohran reached out to get you to run the supermarkets?
Ethan Frisch: No, I don’t want to run the supermarkets. What a horrible business. He has not, thankfully. But maybe they’ll carry us.
Jordan Schneider: Ethan, thank you so much for being a part of ChinaTalk. Promo code CHINATALK for a free jar of your choice on a first order over fifteen dollars, at burlapandbarrel.com. We’ll see you at the Supreme Court.
Oh man, I really enjoyed this episode. I already ordered from Burlap and Barrel for myself and to give as gifts!