Businesses challenge Trump’s tariffs before Supreme Court

Citing the “paralyzing uncertainty” created when tariffs are “added and subtracted at will,” two small businesses came to the Supreme Court on Tuesday asking the justices to quickly weigh in on the legality of President Donald Trump’s reliance on a law giving the president broad authority over economic transactions in a national emergency to impose hundreds of billions of dollars in tariffs. “Until now,” the companies wrote on Tuesday, “no President” in the “nearly 50-year history” of the International Emergency Economic Powers Act “has ever invoked it to impose tariffs—let alone the sweeping worldwide tariffs imposed pursuant to the executive orders challenged here.”

Trump issued the executive orders at the center of the case, imposing the tariffs, between February and April. He relied on the International Emergency Economic Powers Act, which gives the president the authority to “regulate . . . importation” when he has validly declared a national emergency with respect to an “unusual and extraordinary threat.”

The challengers, Learning Resources and hand2mind, are small family-owned businesses that make and sell “hands-on educational toys and products for children.” They “outsource most manufacturing to factories in other countries,” including in Asia. The companies say that paying the tariffs in 2025 will cost them $100 million, “compared with just $2.3 million in 2024—a 44-fold increase.”

The companies went to federal court in Washington, D.C., challenging Trump’s authority under IEEPA to impose the tariffs. On May 29, U.S. District Judge Rudolph Contreras found that the IEEPA tariffs were illegal and posed an “existential threat” to the businesses. He barred the Trump administration from enforcing the tariffs against the companies that brought the lawsuit. Contreras initially put his order on hold for 14 days to give the government time to appeal, but on June 3 – after the government appealed to the U.S. Court of Appeals for the District of Columbia Circuit – he extended that hold.

Meanwhile, in a different case, a three-judge panel of the Court of International Trade also concluded that the tariffs are unlawful. On June 10, the U.S. Court of Appeals for the Federal Circuit put the CIT’s order on hold.

The companies on Tuesday urged the Supreme Court to take up their case and rule on the legality of Trump’s tariffs without waiting for the D.C. Circuit to decide the government’s appeal. Because of the “unremitting whiplash caused by the unfettered tariffing power the President claims,” lawyer Pratik Shah wrote, the court should grant review now, order the two sides to brief the case over the summer, and hear argument in September or October.

Shah noted that the justices have granted review in other recent cases without waiting for the court of appeals to rule first – for example, in a challenge to the Biden administration’s student-loan forgiveness program and a challenge to the inclusion of a question about citizenship on the 2020 census.

Shah also urged the justices to fast-track their consideration of the companies’ petition by ordering a response from the government by June 23. The court should also announce, he said, whether it will take up the case before the justices’ summer recess begins in late June or early July.