Small Businesses Sue Trump to Block New Tariffs on Foreign Imports in U.S. Court

In a significant legal move, five small businesses have initiated a lawsuit against President Donald Trump, aiming to challenge the recently imposed tariffs on foreign imports. The lawsuit, filed in the U.S. Court of International Trade, accuses Trump of unlawfully usurping Congress' authority to levy tariffs by asserting that trade deficits with other countries constitute an emergency. The plaintiffs argue that such a claim is not only unwarranted but also a violation of the principles of representation in taxation.

Allegations Against Trump's Tariffs

The lawsuit contends that Congress has not delegated any power to the President to unilaterally impose across-the-board worldwide tariffs under the International Emergency Economic Powers Act (IEEPA). The plaintiffs, represented by the Liberty Justice Center, assert that Trump's "Liberation Day" tariffs, with rates exceeding 10% on imports from most countries and even higher for several others, are wreaking havoc on small businesses nationwide.

Challenging the Claimed Emergency

The suit vehemently disputes the President's declaration of an emergency, stating that trade deficits, which have persisted for decades without causing economic harm, do not constitute an emergency or an "unusual and extraordinary threat." Furthermore, the Liberty Justice Center points out that the imposition of tariffs on countries with which the United States does not have a trade deficit further undermines the administration's justification for the tariffs.

Demand for Judicial Intervention

The lawsuit calls for the court to declare the President's actions illegal, to enjoin the operation of the executive actions imposing tariffs under the IEEPA, and to reaffirm the fundamental principle of no taxation without representation. The plaintiffs, comprising diverse businesses, include VOS Selections, a New York-based importer and distributor of small-production wines, spirits, and sakes; FishUSA, a Pennsylvania retail and wholesale e-commerce business specializing in sportfishing tackle; Genova Pipe in Utah, a manufacturer of plastic pipes and fittings; MicroKits LLC in Virginia, which produces educational electronic kits; and Terry Precision Cycling, a Vermont-based women’s cycling apparel brand.

Financial Impact on Small Businesses

The lawsuit highlights the significant financial burden imposed on the plaintiffs due to the tariffs. Terry Cycling has already incurred $25,000 in unplanned tariffs this year and projects that the total cost will reach approximately $250,000 by the end of 2025. Furthermore, the company anticipates facing an estimated $1.2 million in tariff costs in 2026, a staggering amount deemed unsustainable for a business of its size.

Seeking Accountability

The lawsuit represents a concerted effort by small businesses to hold the President accountable for what they perceive as an overreach of power and a detrimental impact on their operations. As the legal proceedings unfold, the outcome could have significant implications for the future of tariffs and their impact on small businesses across the country.

In response to the lawsuit, CNBC has reached out to the White House for comments, indicating that the legal challenge is garnering attention at the highest levels of government. The outcome of this lawsuit could set a precedent for the balance of power between the executive branch and Congress in matters of trade and taxation.