(NEW YORK) — In an obscure courthouse in downtown Manhattan on Tuesday, a group of small businesses will take on one of President Donald Trump’s boldest uses of executive authority.
A panel of judges on the Court of International Trade will hear arguments in a lawsuit challenging Trump’s sweeping tariffs, as the president’s trade war continues to disrupt the international economy and raise the specter of a recession.
The lawsuit was filed last month by a group of small businesses, including a New York liquor distributor, Utah pipe company, Virginia electronics store, Pennsylvania-based tackle shop, and Vermont cycling company. Each company argued they rely on imports from countries like China and Mexico and would be irreparably harmed by what they called Trump’s “unprecedented power grab illegal.”
The small business argue that the International Emergency Economic Powers Act does not give the president the power to unilaterally impose tariffs like Trump did last month with a blanket tariff rate and higher rates for certain countries. They described the national emergency Trump used to justify the tariffs as a “figment of his own imagination” because the United States has operated with massive trade deficits for years without causing economic harm.
“If actually granted by statute, this power would be an unlawful delegation of legislative power to the executive without any intelligible principle to limit his discretion,” they argued.
Lawyers with the Department of Justice have pushed back on the lawsuit, saying that Congress permits the president to impose some tariffs, and Trump’s invoking of a national emergency makes his power “broader,” justifying the sweeping tariffs. They have also argued that a court order blocking the tariffs would unlawfully encroach on the president’s authority.
“Plaintiffs’ proposed injunction would be an enormous intrusion on the President’s conduct of foreign affairs and efforts to protect national security under IEEPA and the Constitution,” they argued.
At least six separate lawsuits have targeted Trump’s use of tariffs, including a case filed by the state of California and a coalition of twelve state attorneys general. While some of the cases were filed in district courts, the cases have gradually been transferred to the Court of International Trade, making Tuesday’s argument the first time a panel of judges hears a challenge to Trump’s tariffs.
Last month, the court rejected an emergency request for a temporary order to block the tariffs, finding that the businesses failed to prove that an “immediate and irreparable harm” would stem from the tariffs.
Tuesday’s argument will be heard by a panel of three judges – Gary S. Katzmann, Timothy M. Reif, and Jane A. Restani – who were appointed by Presidents Obama, Trump and Reagan respectively.
Tucked away in a corner of New York’s Foley Square, the Court of International Trade has nationwide jurisdiction on trade disputes and has recently focused its energy on more niche issues, like honey customs disputes and mattress imports. Tuesday’s oral argument is set to provide the most high-profile hearing for the court in recent memory.
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