In Washington, President Donald Trump has launched a major trade conflict by implementing widespread tariffs on imports from nearly all countries, without seeking approval from Congress. This bold move has sparked at least seven legal challenges, with accusations that Trump is overstepping his authority.
The U.S. Court of International Trade, a body dedicated to examining civil lawsuits under international trade law, is set to hold its first hearing on these lawsuits in New York. Five small businesses are urging the court to halt the tariffs imposed by Trump on April 2, a day he called “Liberation Day.”
Trump declared that the substantial and persistent U.S. trade deficits represent a national emergency, invoking the 1977 International Emergency Economic Powers Act (IEPPA) to justify 10% tariffs on various nations. He further enacted higher tariffs of up to 50% on countries exporting more to the U.S. than they import. However, these additional tariffs were later paused for 90 days.
The unexpected tariffs have unsettled global financial markets, raising concerns about potential disruptions to trade and economic slowdowns both in the U.S. and abroad.
Jeffrey Schwab, a senior attorney and leader at the Liberty Justice Center, contends that the president is exceeding his legal bounds. He argues, “That statute doesn’t actually say anything about giving the president the power to tariff.” Schwab is representing the businesses in this case.
In their lawsuit, the companies posit that Trump’s emergency is “a figment of his own imagination,” claiming trade deficits do not constitute an emergency, given that they’ve persisted for decades without harming the economy. The U.S. has been running a trade deficit consistently for 49 years during various economic conditions.
Conversely, the Trump administration draws parallels to President Richard Nixon’s invocation of tariffs during the 1971 economic crisis, utilizing presidential authority under the earlier Trading With the Enemy Act of 1917, which informed the IEPPA.
These legal proceedings against Trump’s tariffs have generated unlikely alliances between states led by Democratic governors and libertarian organizations such as the Liberty Justice Center, which often strive to dismantle government regulations on business. Twelve states have joined the legal dispute against the tariffs in the New York trade court.
Kathleen Claussen, a trade-law scholar from Georgetown Law, emphasizes that this court hearing and a subsequent one for the states’ lawsuit will likely shape the course of future legal confrontations over tariffs. She anticipates that the matter may escalate to the Supreme Court, noting the possibility of conservative judges using the opportunity to reins in presidential powers over tariffs.
While the authority to levy taxes, including tariffs, is constitutionally given to Congress, over time lawmakers have transferred much of this power to the executive branch. Some legislators are now seeking to reclaim it.
For instance, Republican Senator Chuck Grassley and Democratic Senator Maria Cantwell have proposed a law requiring presidents to obtain Congressional approval for new tariffs, which would lapse unless lawmakers sanction them within 60 days.
However, their initiative faces significant obstacles, given the broad support Trump enjoys among Republican lawmakers and his veto capabilities. Warren Maruyama, a former trade lawyer under President George W. Bush, expressed skepticism about its potential success.
Meanwhile, numerous American companies are grappling with the repercussions of Trump’s tariffs, which have elevated the national average tariff rates to their highest since 1934, as per data from Yale University’s Budget Lab.
Victor Schwartz, an importer of wines and spirits in New York City, illustrates the impact on businesses. His company, V.O.S. Selections, faces rising challenges as tariffs impede sourcing international wines his customers demand. Schwartz’s firm is among the plaintiffs in the lawsuit, expressing uncertainty about their financial endurance during this tumultuous period.