Trump Sued By Small Businesses Over Tariffs, Alleging Misuse Of Emergency Economic Powers

A group of small businesses reportedly sued Donald Trump over the new tariffs on Monday, alleging that the U.S. president used his powers unconditionally and that his decision could destroy local businesses.

According to a CNBC report, five small businesses represented by Liberty Justice Center, a nonprofit legal aid group, filed the lawsuit in the U.S. Court of International Trade.

Trump announced a base 10% tariff on all trading partners and a higher rate on several countries on April 2, causing shockwaves across global markets.

His moves last week to pause specific tariffs for 90 days and lower the rate on smartphones, computers, and electronics — while temporarily relieving some industries — have frustrated businesses and investors looking for policy consistency.

So far, several companies, including larger retail firms like Walmart and Nike, have called out a potential hit to their business, while scores of firms are scrambling to reconfigure their supply chain and import strategy.

A staggering 145% import tariff on China, a key importer of gadgets such as the Apple iPhone and electronic parts for industrial machines to automobiles, is particularly concerning.

In their lawsuit, the defendants said that Trump has illegally usurped Congress' power to levy tariffs by claiming that trade deficits with other countries constitute an emergency.

They argued that the International Emergency Economic Powers Act ('IEEPA'), the statute the President invokes, does not authorize him to issue unilateral, worldwide tariffs.

Furthermore, his claim that trade deficits with nations are an emergency "is a figment of his own imagination."

The plaintiffs include VOS Selections, which imports and distributes small-production wines and spirits; FishUSA, a retail and wholesale e-commerce business for sportfishing tackle; and Genova Pipe, which makes plastic pipes and irrigation equipment.

Others are MicroKits, which makes educational electronic kits and musical instruments, and cycling apparel company Terry Precision Cycling.

Terry Cycling reportedly said its business would not survive from its projected tariff expenditure.

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