US small businesses challenge Trump's tariff rationale, cite constitution

The Liberty Justice Center filed the suit for five small companies, including a New York wine distributor, Vermont women's cycling brand, and a Virginia producer of educational kits and instruments

By Sabrina Willmer

 

Several small US businesses sued President Donald Trump over his “Liberation Day” tariffs in the latest legal challenge to his use of sweeping executive powers to extract concessions from foreign trade partners.  

Trump’s use of the International Emergency Economic Powers Act to impose tariffs is unconstitutional and the emergency he declared to justify the levies “is a figment of his own imagination,” the companies said in a suit filed Monday in the US Court of International Trade. “Trade deficits, which have persisted for decades without causing economic harm, are not an emergency.”

 

The suit is at least the third challenging Trump’s tariffs, though some industry groups in the US have been hesitant to oppose the levies in court. IEEPA gives the president broad power to regulate certain financial transactions when declaring a national emergency in response to an “unusual and extraordinary threat.” 

 

 

In a statement, White House spokesman Harrison Fields said, “Never Trumpers will always oppose him, but President Trump is standing up for Main Street by putting an end to our trading partners — especially China — exploiting the US. His plan levels the playing field for businesses and workers to address our country’s national emergency of chronic trade deficits.” 

 

Trump became the first president to use the statute to impose tariffs when he announced levies in February against China, Mexico and Canada to respond to the “extraordinary threat” of undocumented immigrants and illegal drugs moving through US borders. 

 

On April 2, Trump invoked IEEPA on what he called “Liberation Day” to impose a blanket 10 per cent tariff on all imports and put additional duties on almost 60 countries. But a week later, he announced a 90-day pause on the additional tariffs on most countries while boosting duties on Chinese imports to 125 per cent, which he increased to 145 per cent the following day. 

 

The moves by Trump have rattled markets, prompted forecasts of a potential recession and strained relationships with overseas trading partners. 

 

The suit was filed by the libertarian-leaning Liberty Justice Center on behalf of five small companies, including a New York-based wine distributor, a Vermont-based brand of women’s cycling apparel and a Virginia-based producer of educational electronic kits and musical instruments. 

 

An earlier suit was filed by the conservative-funded New Civil Liberties Alliance on behalf of a small stationery business called Emily Ley Paper Inc., which opposed the first two rounds of China tariffs. A separate suit was filed by members of the Blackfeet Nation, a Native American tribe in Montana benefiting from trade with Canada. 

 

“This court should declare the president’s unprecedented power grab illegal,” said attorneys representing the companies in Monday’s lawsuit. They argued that their clients will face increased “costs for the goods they sell, less demand for their higher prices products, and disrupted supply chains, among other threats to their livelihood, up to and including potentially bankrupting otherwise-solvent companies.” 

 

The case is V.O.S. Selections v. Donald Trump, 25-00066, US Court of International Trade.