Major companies are sitting out the court challenge to President Donald Trump's sweeping global tariffs despite it causing them immense pain — instead leaving the fight to a group of small businesses, according to a report.
That group, including a family-owned toymaker in Illinois and a New York-based wine importer, have challenged the tariffs all the way up to the U.S. Supreme Court, which will hear arguments Wednesday. But their larger competitors have stayed on the sidelines because of fear of how Trump will react, reported CNN.
“I was shocked that those with much more power and money did not step up,” said Victor Owen Schwartz, the founder of V.O.S. Selections, a wine and spirits company that's one of the lead plaintiffs in the challenge. “So when I was afforded the opportunity to speak for small American business, I took it.”
Trump claims a 1970s-era emergency law grants him the authority to "regulate importation" during emergencies, although tariffs aren't specifically mentioned, but the small businesses challenging him complained the on-and-off tariffs are driving up costs and uncertainty.
“It’s an asphyxiating tax,” said Rick Woldenberg, the CEO of Learning Resources, another lead plaintiff. “I’m not targeting Mr. Trump because I’m not a politician. I’m a taxpayer who’s been hit with an unlawful tax.”
The Trump administration has argued the International Emergency Economic Powers Act covers tariffs, even if the words isn't explicitly mentioned, and has warned that losing the Supreme Court case would have “catastrophic consequences."
“Plaintiffs would unwind trade arrangements worth trillions of dollars, as President Trump has leveraged the IEEPA tariffs into negotiated framework deals with major trading partners – including the European Union, the United Kingdom, Japan, South Korea, and now China – that address underlying causes of the declared emergencies,” U.S. Solicitor General D. John Sauer argued last week before the Supreme Court.
Major companies frequently take sides in Supreme Court cases by filing friend-of-court briefs, but the Trump administration's retribution campaign against critics has seemingly silenced them on the tariff issue that affects many of them, CNN reported.
“The federal government has immense leverage and immense power and can upend your business with a tweet or a tax investigation,” said Georgetown Law professor Gregory Shaffer. “I think there’s a sense that companies wanted to be more careful with this administration.”
It's not clear who's funding the tariff challenge, but a leader of the group involved with the case, Jeffrey Schwab of Liberty Justice Center, told CNN that it's funded by “individuals and groups that support our mission."
“There are a lot of calculations going on,” said Gregory Husisian, a trade lawyer who represents large importers for the Foley & Lardner law firm. "What do you really gain by being the person who sticks your neck out?”
Cassie Abel, founder and CEO of the women’s outdoor apparel company Wild Rye, agreed bigger companies were afraid of retaliation, pointing out that Walmart and other retailers were hit with blowback from Trump when they threatened tariff-related price increases.
“That was a clear signal that anyone who wants to speak out against this is going to be in the pain cave,” said Abel, who joined an amicus brief with other small businesses opposed to the tariffs.
