As part of a journey spanning about 7,500 miles that starts in Shenzhen, China, 19 shipments are making their way to Rick Woldenberg, the CEO of Learning Resources, a toy company based in Vernon Hills, Illinois.
When these containers filled with puzzle cards, binoculars for children, and other items arrive at a U.S. port, Mr. Woldenberg will have to make a tough and costly choice. He can either pay the enormous tariffs imposed by President Trump on most imported goods or risk running low on essential stock, potentially harming his business’s financial health.
Mr. Woldenberg anticipates a mix of both options. However, he has also decided to take a more proactive stance by legally challenging President Trump’s right to impose some of these tariffs.
As we near four weeks into an expensive global trade conflict with no clear resolution, President Trump is met with a wave of lawsuits from state officials, small businesses, and previously supportive political groups, all arguing that the president does not have the authority to unilaterally tax imports at will.
These lawsuits are significant, not only because tariffs have upset financial markets and may push the U.S. toward a recession but also because they will test Mr. Trump’s claims of broad presidential authority while highlighting the tough choice his opponents face about resisting such moves without risking backlash.
Interestingly, none of the lawsuits filed recently have backing from major business lobbying organizations, even though many, including the U.S. Chamber of Commerce and the Business Roundtable, have criticized the president’s tariffs and pushed for mitigation. The chamber considered launching a lawsuit but eventually decided against it, believing it would not be the most effective approach for now, according to Neil Bradley, the organization’s executive vice president.
“Working with the administration for a swift reduction in tariffs seems the most beneficial for businesses,” he noted.
This challenge has fallen to a diverse group of litigants, including Mr. Woldenberg, whose attorneys filed a lawsuit on Tuesday. He stated that the financial burden of the tariffs was so excessive that he felt he had “nothing to lose” by pursuing this legal route.
“I’m determined to do everything I can to keep our business afloat, but we are struggling,” he added.
Last week, a coalition of Democratic attorneys general from states like Colorado, New York, and Oregon also petitioned a federal court to block many of President Trump’s tariffs, claiming they had disrupted the constitutional balance and caused chaos within the American economy. Earlier this month, California filed its own lawsuit, asserting that the president’s policies negatively affected its economy and budget.
The White House has yet to respond to a request for comment, and the Business Roundtable also has not provided any remarks.
Central to these legal disputes is a law from the 1970s known as the International Emergency Economic Powers Act. This law allows the president to impose trade embargoes, set sanctions, and restrict foreign investment when necessary to counter foreign threats.
President Trump used this law to apply his initial tariffs on Chinese goods, framing it as a measure against the influx of fentanyl into the U.S. He also applied it to enforce a 10 percent tax on imports from almost all other countries, thereby justifying what he refers to as “reciprocal” tariffs, which could impose even higher taxes on other nations, including U.S. allies. To demonstrate a state of emergency, he largely cited the trade deficit: the difference between U.S. exports and imports.
No previous president has enacted such import taxes under this law, which notably does not mention “tariff” at all. This gap now leads to a series of crucial legal challenges, partly resting on whether the law indeed gives the president authority that isn’t explicitly detailed as tariffs, as stated by Ted Murphy, co-leader of the global arbitration, trade, and advocacy sector at Sidley Austin law firm.
The most recent lawsuit was filed on Thursday by the Pacific Legal Foundation, a group with alleged connections to the conservative donor Charles Koch. This organization is representing a clothing company, a board game creator, and other small enterprises, asserting that Mr. Trump’s imposition of a “unconstitutional and unlawful” 145 percent tariff on Chinese goods has led to increased costs for American businesses.
Jamey Stegmaier, co-founder of Stonemaier Games and a participant in the lawsuit, mentioned that his company has over 250,000 board games and other items in order that cannot be easily imported from China without facing a “total tariff expense of around $1.5 million.”
Deciding to sue was the “right thing to do” but still a challenging decision, he said, given his concerns about possible repercussions from President Trump. “It’s quite daunting to oppose the administration at this time,” he remarked.
Another legal organization, also connected to Mr. Koch and conservative funder Leonard A. Leo, took action earlier this month on behalf of a Florida company facing steep costs from the tariffs on China. Mr. Leo serves as co-chair of the Federalist Society, which has provided counsel to Mr. Trump regarding judicial selections.
The organization behind this lawsuit, the New Civil Liberties Alliance, does not fully disclose its list of donors, nor do similar organizations, making it challenging to ascertain who is financially backing each of the new tariff-related cases.
In a different lawsuit, two members from one of the largest tribes in the U.S. claimed that President Trump’s tariffs on Canadian goods infringe on treaty rights, asking a judge to suspend taxes on imports arriving at significant entry points.
Rob Bonta, California’s Democratic attorney general, stated that the state’s tariff litigation aligns with its other legal efforts against the president and centers around the “core issue of executive authority.”
“We have consistently asserted that we will not permit this president to claim authority he does not possess,” Mr. Bonta expressed.
President Trump maintains that he is proceeding with tariffs to generate substantial revenue, boost domestic manufacturing, and compel U.S. trading partners to make concessions, including the removal of tariffs on American goods. Without the economic emergency law, the president could have faced significant limitations…
Instead of taking quicker routes, he opted for much slower and narrower paths to tariffs, similar to the sector-specific levies he imposed on industries like automotive.
Greta Peisch, a former trade official and current partner at the law firm Wiley Rein, mentioned that these tariffs are seen as more of an “established practice” that stem from federal probes into those sectors. Thus, contesting them would present a significant challenge.
When Congress enacted the economic emergency law in 1977, it aimed to limit the powers of the president following previous instances of overreach with emergency declarations. For example, President Richard M. Nixon had invoked an earlier trade provision to set his own 10 percent tariff on imports, a move that was also contested in court, yet he won.
Years later, Donald Trump’s lawyers have referred to this legislative background to support their argument for imposing tariffs in response to economic crises—primarily because Congress did not expressly prohibit this action. This stance has conflicted with constitutional experts who argue that the executive branch lacks the authority to assume powers not explicitly conferred by Congress.
“The president cannot impose tariffs beyond the authorities granted by Congress,” stated Jeffrey Schwab, a senior counsel at the Liberty Justice Center, a nonprofit previously connected to Richard Uihlein, an Illinois businessman and Republican donor.
Recently, this group filed a lawsuit against the Trump administration on behalf of small businesses claiming that the recent tariffs have negatively impacted them. One of these businesses belongs to Victor Schwartz, who founded VOS Selections, a New York City company that imports a variety of specialty wines, spirits, and sake.
For now, Mr. Schwartz indicated that his company has mostly avoided issues, having secured its latest shipments before the highest tariffs kick in. However, he anticipates delaying or canceling orders and making other adjustments soon.
Criticizing “billionaires sitting around doing nothing,” Mr. Schwartz shared his motivation for joining the lawsuit: “I just felt like it was time to take action instead of remaining silent.”
