US Small Businesses Sue Trump Over 'Devastating' Tariffs

Though U.S. President Donald Trump temporarily paused some of his "Liberation Day" tariffs for negotiations, a nonprofit firm and legal scholar still sued him and other officials on Monday on behalf of five import-reliant small businesses, asking the U.S. Court of International Trade to "declare the president's unprecedented power grab illegal."

Ilya Somin, a Cato Institute chair and George Mason University law professor, announced earlier this month on a legal blog hosted by the outlet Reason that he and the Liberty Justice Center—which has a record of representing libertarian positions in court battles—were "looking for appropriate plaintiffs to bring this type of case."

Monday's complaint was filed on behalf of FishUSA, Genova Pipe, MicroKits, Terry Precision Cycling, and VOS Selections. It argues that "the statute the president invokes—the International Emergency Economic Powers Act (IEEPA)—does not authorize the president to unilaterally issue across-the-board worldwide tariffs."

"And the president's justification does not meet the standards set forth in the IEEPA," the complaint continues. "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. Nor do these trade deficits constitute an 'unusual and extraordinary threat.' The president's attempt to use IEEPA to impose sweeping tariffs also runs afoul of the major questions doctrine."

"It's devastating. The government shouldn't be able to make sweeping economic decisions like this without any checks or accountability."

Somin said in a Monday statement that "if starting the biggest trade war since the Great Depression based on a law that doesn't even mention tariffs is not an unconstitutional usurpation of legislative power, I don't know what is."

Jeffrey Schwab, senior counsel at the Liberty Justice Center, stressed that "no one person should have the power to impose taxes that have such vast global economic consequences... The Constitution gives the power to set tax rates—including tariffs—to Congress, not the president."

Just hours after Trump's taxes on imports took effect last week, he paused what he is misleadingly calling "reciprocal" tariffs—except for those on China, which now faces a minimum rate of 145%. However, his 10% baseline rate is in effect. As experts fret over a possible recession, the business leaders involved in the new legal challenge shared how they are already struggling because of the evolving policy.

"Instead of focusing on growing our business, creating more jobs in our region, and developing new products that our customers want, we are spending countless hours trying to navigate the tariff chaos that the president is causing for us and all our vendors," said FishUSA president and co-founder Dan Pastore. "It takes years working with factories to design and build our products, and we cannot just shift that business to the U.S. without starting the whole process over again."

Andrew Reese, president of Genova Pipe in Salt Lake City, Utah, explained that "we operate seven manufacturing facilities across the United States and are committed to producing high-quality products in America. With limited domestic sources, we rely on imports to meet our production needs. The newly imposed tariffs are increasing our raw material costs and hindering our ability to compete in the export market."

David Levi of MicroKits in Charlottesville, Virginia, similarly said that "we build as much as we can in the U.S. We're proud of that, but these surprise tariffs are crushing us. It's devastating. The government shouldn't be able to make sweeping economic decisions like this without any checks or accountability."

Critics of Trump's tariff policy have blasted not only how sweeping his levies have been but also the chaotic speed. Terry Precision Cycling president Nik Holm noted that "even before this year's increases, we were already paying tariffs of up to 39.5%. With the additional 145% now imposed, we can't survive long enough to shift course."

"Twenty years ago, we made all our apparel in the U.S. but gradually moved production overseas to sustain our business," the Vermonter detailed. "Bringing manufacturing back would require a long-term strategy supported by consistent government policies, investment in factories with skilled sewers, and access to raw materials that are not subject to high tariffs. Many of our products rely on raw materials that are simply not produced in the U.S."

Victor Owen Schwartz, whose New York-based VOS Selections specializes in imported alcohol, said that "as a heavily regulated business, we cannot turn on a dime... We are required to post our prices with the State Liquor Authority a full month in advance, so we're locked into pricing decisions that don't account for these sudden, unpredictable tariffs. This is devastating to our ability to operate and support the farmers and producers we work with around the world."

Trump is also facing a suit filed earlier this month in the U.S. District Court for the Northern District of Florida. That case involves Emily Ley, whose company Simplified makes home management products, including planners, and relies on imports from China.

As The New York Timesreported last week:

Her lawyers are from the New Civil Liberties Alliance, a libertarian-leaning nonprofit that counts among its financial backers Donors Trust, a group with ties to Leonard A. Leo, who is a co-chairman of the Federalist Society.

The Federalist Society is an influential legal group that advised Mr. Trump through the confirmation of justices he appointed to form the current conservative supermajority on the Supreme Court, though some in Mr. Trump's circle came to believe that its leaders were out of step with the president's political movement.

Another donor to New Civil Liberties Alliance is Charles Koch, the billionaire industrialist and Republican megadonor.

Additionally, as The Hill pointed out Monday, "four members of the Blackfeet Nation previously sued over Trump's Canada tariffs, including the Canadian aspects of his April 2 announcement."

Along with arguments over the legality of the duties, Trump's tariff announcement and pause sparked concerns about potential stock market manipulation and insider trading, triggering calls for investigation, including from members of Congress.