The Five Small Businesses That Helped Block Trump’s Tariffs

The federal Court of International Trade has blocked President Donald Trump’s sweeping global tariffs, arguing that emergency laws invoked by the Administration did not give Trump unilateral authority to impose the levies.

Per the court, the U.S. Constitution gives Congress exclusive powers to regulate trade with other countries, something which Trump cannot supersede.

The court also blocked a different set of levies the Trump Administration imposed on Canada, China, and Mexico, for what the White House said was in response to the unacceptable flow of drugs and illegal immigrants across the U.S. border.

Trump announced most of his tariffs—the ones he calls “reciprocal”— on April 2, his self-appointed “Liberation Day.” A baseline rate of 10% was placed on U.S. imports, while additional “reciprocal” tariffs were doled out on top of those. Trump then announced a 90-day pause on the additional tariffs for most countries, allowing time for negotiations. The U.S. and China later came to a separate agreement, agreeing in May to significantly reduce tariffs on each other for a 90-day period.

The Court of International Trade’s May 28 ruling is based on two separate cases.

One lawsuit was filed by a coalition of 12 state governments on April 24, led by Oregon Attorney General Dan Rayfield.

“The court’s ruling is a victory not just for Oregon, but for working families, small businesses, and everyday Americans. President Trump’s sweeping tariffs were unlawful, reckless, and economically devastating. They triggered retaliatory measures, inflated prices on essential goods, and placed an unfair burden on American families, small businesses and manufacturers,” said Rayfield, reacting to the court victory. “We brought this case because the Constitution doesn’t give any president unchecked authority to upend the economy. This ruling reaffirms that our laws matter, and that trade decisions can’t be made on the President’s whim.”

The other lawsuit was filed by the nonpartisan Liberty Justice Center on April 14, representing five small businesses facing the “devastating” impact of such tariffs.

The Liberty Justice Center argued that the Trump Administration could not “issue across-the-board worldwide tariffs without congressional approval.” The counsel said that the five owner-operated businesses it filed on behalf of had all been “severely harmed by the tariffs,” highlighting “the human and economic toll of unchecked executive power.”

Responding to the May 28 court victory, Jeffrey Schwab, senior counsel and director of litigation at the Liberty Justice Center, said: “This ruling reaffirms that the President must act within the bounds of the law, and it protects American businesses and consumers from the destabilizing effects of volatile, unilaterally imposed tariffs.”

Co-counsel Ilya Somin added: ““It’s great to see that the court unanimously ruled against this massive power grab by the President. The ruling emphasizes that he was wrong to claim a virtually unlimited power to impose tariffs, that IEEPA (International Emergency Economic Powers Act) law doesn’t grant any such boundless authority, and that it would be unconstitutional if it did.”

Trump cited enacting the IEEPA when planning to impose his widespread tariffs.

The five small businesses at the heart of Trump's tariffs pushback

VOS Selections

The New York-based wine company said that Trump’s tariffs: “threaten to unravel everything VOS has spent a generation building.”

The company, which has been running for almost 40 years, said that its expertise in wine and spirits is something that “cannot be replicated,” in the U.S., pushing back against Trump’s often repeated statement that if products are made in the U.S., they won’t be subjected to tariffs.

The company highlighted four main issues that have arisen as a result of Trump's tariffs threats.

VOS said that buyers have been holding off on orders due to uncertainty, amid Trump’s back-and-forth decision making regarding levies and deadlines. The small business also flagged how its cash flow is under “immediate strain,” even if costs are eventually passed onto customers.

Additionally, VOS said it cannot gamble on unknown prices months in advance and that the knock on-effects, such as reduced purchasing capacity and smaller cash flow, from partners have also hit the business hard.

FishUSA

Based near Lake Erie in Pennsylvania, wholesale and retailer of fishing tackle and apparel FishUSA said that it is “reeling from the tariffs.”

In a statement issued prior to the court ruling, the company said: “We’re a Pennsylvania business employing dozens of hardworking Americans, trying to compete in a global market. These tariffs make it nearly impossible to plan, price, or grow.”

The retailer added that it has been particularly impacted by tariffs imposed on Asian countries, from which it imports many of its manufactured fishing goods. Suppliers have already preemptively raised prices in anticipation, and FishUSA says that switching to U.S.-based production could take years to fully enact.

MicroKits

David Levi runs the business out of a workshop in Charlottesville, Virginia. The company designs small electronic kits aimed at teaching children how to build simple devices and gadgets. Its most popular product instructs children how to assemble a musical instrument from scratch.

In a statement published by the Liberty Justice Center, Levi likened Trump’s tariffs to a “death sentence.”

Much like other businesses, Levi has found the uncertainty and back-and-forth nature of Trump’s tariffs to be a major stumbling block when it comes to completing orders.

“I could place an order for parts today, and by the time it arrives, the tariff might have doubled,” Levi said. “I can’t plan. I can’t budget. I can’t grow.”

Terry Precision Cycling

A small business, Terry Precision Cycling focuses solely on women’s cycling, the first company to do so, according to its founder, Nik Holm. But Trump’s tariffs were described by Holm as the “single greatest threat,” that his company has faced in its 40 years of operations.

In a statement, Holm said: “They’re indiscriminate, unmanageable, and totally disconnected from economic reality.”

Holm said his company joining the lawsuit not just about the economic impact, but “about defending the right to build and run a business without getting crushed by unpredictable government overreach.”

Genova Pipe 

At its Washington State factory, Genova Pipe manufactures ABS pipe, importing crucial resin materials from South Korea and Taiwan. Most of the company’s product is then exported to Canada.

Genova Pipe has an additional six factories across the U.S. After joining the lawsuit,Andrew Reese, the president of the company, said in a statement: “The newly-imposed tariffs are increasing our raw material costs and hindering our ability to compete in the export market.” 

Reese said that over 75% of the company’s resin material imports are sourced from Asia, and that replacing these suppliers with U.S.-based manufacturers was not a feasible option. With most of his customers in Canada, Reese has major concerns that buyers will opt for local, cheaper manufacturers if tariffs force Genova Pipe to inevitably raise its prices.

What is the Court of International Trade and what does it do?

The Court of International Trade, established in its current form in 1980, has jurisdiction across the country, in particular over any civil cases related to international trade and U.S. customs. 

Under the Customs Courts Act of 1980, the Court of International Trade “may grant any relief appropriate to the particular case before it, including, but not limited to, money judgments, writs of mandamus, and preliminary or permanent injunctions.”

It also has jurisdiction over civil cases brought by the United States relating to “import transactions, as well as counterclaims, cross-claims, and third-party actions relating to actions pending in the court.”

In its May 28 ruling, the Court said: “The worldwide and retaliatory tariff orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs.”

Now that Trump's tariffs have been blocked, what happens next?

The court has ruled in favour of a permanent injunction on all tariffs worldwide, which Trump has 10 days to put into effect by issuing new orders that reflect the ruling.

However, the judges also said that Trump has the ability to impose tariffs of 15% for 150 days in cases of “serious and large” trade deficits and unfair trade practices, available due to the Trade Act passed by Congress in 1974. However, these tariffs could still be subject to constraints.

The Trade Act also “removes the President’s power to impose remedies in response to balance-of-payments deficits, and specifically trade deficits, from the broader powers granted to a president during a national emergency.”

The Trump Administration is planning to appeal the decision. This dispute will first come to the U.S. Court of Appeals, but could ultimately end up in the U.S. Supreme Court.