The owner of a Pensacola stationery firm is asking a federal court to declare President Trump’s China tariffs an unconstitutional threat to small businesses like hers, which are now facing higher costs, raised prices or perhaps insolvency.
Emily Ley is the plaintiff in the lawsuit that was filed April 3 in the Northern District of Florida with the help of the Washington-based New Civil Liberties Alliance. The defendants, including Trump Homeland Security Secretary Kristi Noem and the acting commissioner for U.S. Customs and Border Protection, Pete Flores, are accused of illegally imposing the tariff regime using the 1977 International Emergency Economic Powers Act (IEEPA).
“A tariff is a tax on Americans’ commerce with other countries,” the lawsuit states. “The Constitution assigns Congress exclusive power to impose tariffs and regulate foreign commerce. Presidents can impose tariffs only when Congress grants permission, which it has done in carefully drawn trade statutes.”
The complaint argues that the new China tariffs are financially strangling Ley’s company, called Simplified, which sells planners and other home-management items that are produced using materials imported from China.
“Under current plans, the new tariffs will impose hundreds of thousands of dollars in costs on Simplified,” the lawsuit states. “If it moves its manufacturing operations away from China, this would impose further costs. Either course would require Simplified to raise its prices to its customers and either reduce its already small staff or not hire more staff.”
Simon Brown, spokesman for the advocacy group Small Business Majority, said the China tariffs are causing anxiety among many small businesses such as Ley’s.
“Most small businesses operate on thin margins to begin with, so even a slight increase in operating costs can put a small business in the red,” Brown told the Florida Record in an email. “Since many small businesses cannot afford to absorb the cost of tariffs that are even 10%, some small companies will inevitably have to make the difficult decision to pass cost increases on to their customers.”
In contrast, larger businesses with greater resources have the ability to absorb some of the costs resulting from tariffs and keep their prices relatively low for a time to undercut their competitors, he said.
“Ultimately, very few small businesses have the ability to avoid the negative impacts of tariffs, meaning some will be forced to close their doors if their businesses are no longer profitable,” Brown said.
The lawsuit indicates that the IEEPA authorizes presidents to impose sanctions to deal with international emergencies. But it doesn’t give presidents the power to place tariffs on goods imported from other nations, according to the complaint.
The plaintiff is asking the court to impose a permanent injunction to prevent the defendants from enforcing the executive orders on the China tariffs and to award the plaintiffs court costs and reasonable attorney fees.
“The Constitutional power ‘to lay and collect Taxes, Duties, Imposts and Excises’ and ‘to regulate commerce with foreign Nations’ belongs to Congress,” John Vecchione, senior litigation counsel for the New Civil Liberties Alliance, said in a prepared statement. “The administration’s actions followed none of these constitutional commands, and the statute it cites does not even use the word ‘tariff’ or ‘tax.’ This unlawful ‘impost’ must fall.”