The authority of the president to issue across-the-board tariffs is being challenged by a lawsuit from a group of five small businesses.
President Donald Trump issued a 10% tariff on all imports and higher tariffs on several nations during his “Liberation Day” ceremony on April 2. Since then, he has rescinded many of the reciprocal tariffs while increasing those on China.
‘Trade deficits, which have persisted for decades without causing economic harm, are not an emergency.’
The lawsuit, filed by the Liberty Justice Center on behalf of several businesses, argues that Trump illegally issued the tariffs based on the dubious determination of an emergency trade situation.
“His claimed emergency is a figment of his own imagination: trade deficits, which have persisted for decades without causing economic harm, are not an emergency,” reads the lawsuit. “Nor do these trade deficits constitute an ‘unusual and extraordinary threat.’”
The lawsuit argues that Trump has wrongfully invoked the International Emergency Economic Powers Act by claiming that decades of trade deficits constitute an emergency.
Among the businesses named as plaintiffs in the lawsuit was Terry Precision Cycling, a women’s cycling apparel company out of Vermont.
“Terry Cycling has already paid $25,000 in unplanned tariffs this year for goods for which Terry was the importer of record, and Terry projects that the tariffs will cost the company approximately $250,000 by the end of 2025,” the lawsuit continues.
The stock market reacted negatively to the tariffs and at one point had lost more than $10 trillion in valuation. It has since recovered some, but not all, of the losses.
The trade war between China and the U.S. has led to tariffs over 100%, which will likely lead to a cessation of nearly all trade between the two countries. The president has lost some support in recent polling because of the economic turmoil that resulted from his tariff policies.
“China played it wrong, they panicked — the one thing they cannot afford to do!” Trump said about Chinese retaliatory tariffs.
“If the U.S. continues to increase tariffs on Chinese exports, China will not respond,” said China’s Ministry of Finance in a statement. “Given the current level of tariffs, U.S. goods exported to China are no longer market-viable.”
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