A U.S. trade court has ruled on President Trump’s new round of import tariffs — covering thousands of products from nearly every country — calling them “unlawful.” For now, though, while the administration pursues an appeal, those tariffs remain in place.
In the meantime, business owners say they’re left guessing how much they’ll pay to import goods with trade rules that can change seemingly overnight.
“The uncertainty surrounding tariffs is tough for our business, because we need to know what things are going to cost us three, six and 12 months down the road,” says Michael Brey, owner of Hobby Works, a Maryland-based retail chain.
Where the tariff situation stands
The tariffs, announced April 2 under the International Emergency Economic Powers Act, added a 10% baseline tariff on most imported goods, a 20% tariff on Chinese imports and a 25% tariff on certain Canadian and Mexican goods that don’t comply with the USMCA trade agreement.
The U.S. Court of International Trade ruled Wednesday that the administration overstepped its executive authority by using IEEPA to impose these tariffs.
Tariffs imposed under other trade laws — including 25% tariffs on steel, aluminum and auto imports — remain in effect.
In response to the ruling, the Trump administration argued that IEEPA gives the president broad authority in foreign affairs and that overturning the tariffs would improperly narrow those powers.
“I think it’s a good ruling,” Oliver Dunford tells CNBC Make It. Dunford is a senior attorney at Pacific Legal Foundation, which represents small businesses challenging the tariffs. “There’s a good chance that it will be upheld.”
On Thursday, a federal appeals court paused the lower court’s ruling, keeping tariffs in place while the government appeals. The next round of legal filings is due by June 9.
Business owners stuck in limbo
Many small businesses say the shifting trade landscape creates headaches beyond the direct costs of the tariffs. Since March, Hobby Works has worked through thousands of price changes to reflect fluctuating import costs, Brey says.
However, if the ruling is ultimately upheld, businesses could be eligible for refunds on tariffs already paid, though it could take months for any process to play out, says Dunford.
Annie Park, co-owner of Sarah’s Homemade Ice Cream in the Washington, D.C. area, says she’s “relieved” by the ruling. One of her suppliers had already offered tariff credits before the appeals court’s stay, she says.
In the meantime, her expenses have increased and her business is making adjustments to its operations, she says, such as discontinuing certain flavors due to higher costs.
What could happen next
Even if these particular tariffs are struck down, the White House has other tools it could use to impose new ones, including sections of U.S. trade law that allow tariffs on national security or retaliatory grounds, Goldman Sachs analysts have noted.
The administration could try to take the current case to the U.S. Supreme Court if it loses on appeal, which would extend the legal fight even further.
For now, the uncertainty is likely to continue as the appeal moves forward and the administration weighs its next steps.
“The volatility and uncertainty is making stock market speculators rich, but it is killing the people who actually have to operate the businesses,” says Brey.
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