US Small Businesses Sue Trump Over Tariffs, Calling Trade Actions an ‘Unprecedented Power Grab’
Five small U.S. companies are suing President Donald Trump in an effort to halt the imposition of new duties that they say could prove devastating to their businesses.
Filed in the U.S. Court of International Trade on Monday, the complaint alleges that the Commander in Chief “claims the authority to unilaterally levy tariffs on goods imported from any and every country in the world, at any rate, calculated via any methodology—or mere caprice—immediately, with no notice, or public comment, or phase-in, or delay in implementation, despite massive economic impacts that are likely to do severe damage to the global economy.”
Not only has that power not been granted in statute by Congress, they said—if Congress were to do so, it would be “an unlawful delegation of legislative power.”
Watch on FN
Trump has invoked the International Emergency Economic Powers Act (IEEPA), a little-known Jimmy Carter-era trade tool, to issue unilateral tariffs against America’s trade partners—an action that the plaintiffs claim is not justified by the law’s standards.
“His claimed emergency is a figment of his own imagination: trade deficits, which have persisted for decades without causing economic harm, are not an emergency. Nor do these trade deficits constitute an ‘unusual and extraordinary threat,’” they wrote.
The plaintiffs include New York-based Victor Owen Schwartz, a distributor of wine and spirits, Utah-headquartered Genova Pipe, which manufactures plastic pipes for plumbing and other applications, Plaintiff MicroKits, LLC, a Virginia company that makes educational electronic kits and musical instruments, Pennsylvania’s Plaintiff FishUSA Inc., which sells sportfishing tackle and related gear, and Vermont-based Terry Precision Cycling, LLC, a maker of women’s cycling apparel.
Terry Precision claimed that products and inputs imported from other countries are the lifeblood of its business, as it brings in finished goods from China (now subject to a 145-percent duty rate), along with other highly-tariffed countries like Vietnam, Taiwan, Italy and the Philippines. And while the company has onshore operations to manufacture some of its goods domestically, the fabrics and trims used to do so are imported from Guatemala, El Salvador, China, and the European Union.
“The imports Terry Cycling relies on are not reasonably available from a supplier in the United States,” the group wrote in the complaint.
The small businesses are asking that the court intervene and “declare the President’s unprecedented power grab illegal.” The complaint also requests that it prevent Trump from utilizing executive actions to illicitly impose tariffs under IEEPA, and that it “reaffirm this country’s core founding principle: there shall be no taxation without representation.”
These SMBs are far from the only U.S.-based businesses feeling the weight of Trump’s tariffs. Increasingly, American enterprises are making their sentiments known.
Los Angeles-based men’s apparel brand CUTS has been imperiled by the administration’s “reciprocal” tariffs on Vietnam and other countries, as well as the end to the de minimis exception, which allows the company to ship products directly from its factories in China to consumers’ doorsteps duty free.
CUTS and its contemporaries in the direct-to-consumer e-commerce space have “bootstrapped their way to success, created American jobs, and are now enjoying the fruits of their hard work in this country,” Steven Borelli, the brand’s founder and CEO, wrote on X—but the changes to trade policy “are happening too quickly.”
“Removing 321 de minimis at the same time as increasing tariffs on China from 25% to 145% will be the death of thousands of eCommerce companies just like @cutsclothing,” he said.
Borelli noted that he voted for the president in all three of his runs for office, believing in his “America First” vision for the country, and while the brand is “aligned with that mission,” the way the new duties and de minimis ban have been rolled out “creates tremendous uncertainty.” The chief executive said CUTS has been proud to use the Section 321 exemption “as a way to compete in a global market,” but combined with the new heavy duty burden, its removal will render its current margin structure “unsustainable.”
“My goal in writing this is not to oppose you, but to stand with you in your mission of making America great again. We want to protect American jobs and help bring manufacturing back. CUTS is ready to help lead that charge—but it cannot happen overnight,” Borelli wrote. “My request is that both the removal of 321 and the China tariff increases be delayed with enough time for U.S. companies to react—which, for production businesses, is at least 9 to 12 months.”
An extended time frame for implementation would give the company time to set up new manufacturing “and even pursue U.S. production that aligns with your vision,” he said, addressing the president directly. “I humbly ask that you take this seriously. Every day this continues, more businesses will fail.”
