The former President Donald Trump’s administration initiated a record-setting legal war. This current fight is about the tariffs imposed through the International Emergency Economic Powers Act (IEEPA). It’s the first time in the history of the U.S. that such broad tariffs have been applied. Now is the time for lawmakers, small businesses and legal experts to raise their voices.
Trump’s return to the White House saw him implementing a 10% universal tariff on most countries, which has particularly affected trade with Canada. Now the Canadian economy is starting to bleed from the tariffs on steel, aluminum and autos. In particular, Trump suspended the import duties in part to bring them into compliance with the terms of the Canada-U.S.-Mexico Agreement. Yet the effects of these tariffs are still controversial.
A coalition of lawyers from 12 states has argued in court that these tariffs render U.S. trade policy vulnerable to Trump’s personal decisions, raising issues of governance and constitutional authority. Opponents of the Trump tariffs have made a separation of powers argument, one rooted in constitutional principles. A recent decision from a federal court in New York bolsters this perspective by ruling against that overly expansive interpretation of the IEEPA.
At this point, there are at least seven lawsuits pending that attack the legality of Trump’s tariffs. A federal appeals court issued a key victory to CFT recently by agreeing to keep the tariffs in place while the legal fight continues. Oral arguments in these cases are scheduled to start as soon as July 31.
In a broader context, thirty-three senators have filed an amicus brief expressing concern that Trump’s tariffs could adversely affect small- and medium-sized businesses across the nation. They caution that these duties may inhibit economic development or endanger employment prospects. Small businesses, specifically, have less financial leeway to absorb the added expense.
“Small businesses do not have cash-on-hand or capital reserves to pay the increased tariffs, nor can they quickly adapt to them by modifying supply chains.” – The Canadian Press report
Five average American small businesses are standing together in their opposition to global tariffs. They have the backing of the Liberty Justice Center as the legal battle unfolds. Their advocacy underscores the real threats to sustainability and workforce retention looming within their business model.
“If they cannot pass on the tariff costs to consumers — which would create additional harms for… constituents — many face letting employees go or filing for bankruptcy. Even a few weeks of additional tariffs means small businesses will suffer irreparable harm.” – The Canadian Press report
In response to these challenges, Kush Desai has emphasized that the Trump administration is operating within the constitutional framework afforded to the executive branch. He argues that these powers are necessary to tackle national emergencies related to trade deficits and issues like drug trafficking.
“The Trump administration is legally using the powers granted to the executive branch by the Constitution and Congress to address our country’s national emergencies of persistent goods trade deficits and drug trafficking.” – Kush Desai
Desai was hopeful about prevailing on the merits in court. Among other positives, he pointed to the U.S. Circuit Court of Appeals’ issuance of a stay order on tariffs as the right step forward.
“The U.S. Circuit Court of Appeals’ stay order is a welcome development, and we look forward to ultimately prevailing in court.” – Kush Desai
University of Michigan legal scholar Ilya Somin is still guardedly optimistic about the outcome of still-pending litigation. His conclusion was that there is a strong case to be made against Trump’s interpretation of expansive tariff authority.
“We have a strong case, and I remain guardedly optimistic that the appellate court will ultimately see that the president’s claim of virtually unlimited power to impose tariffs is blatantly illegal — which is what every court to have considered the issue so far has concluded.” – Ilya Somin
When Trump’s administration first kicked off its tariff offensive last April, it was not so discriminating. When the former president recently declared an emergency at our northern border, it was in the context of fentanyl trafficking. Unfortunately, this declaration has muddied the waters and created new economy-wide obligations on Canadian imports.
Stakeholders in every sector are getting ready for what will likely be drastic effects on U.S. relations with international trade partners and domestic economic wellbeing.
