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Boston Globe
an hour ago
- Business
- Boston Globe
Facing an ‘existential threat,' a Vermont business helped take on Trump's tariffs
Although Terry Precision Cycling manufactures much of its merchandise in Spokane, Wash., it also imports materials and finished goods from China, Taiwan, Vietnam, El Salvador, Italy and the Philippines, said Nik Holm, its president. President Trump has sharply increased tariffs on all those countries, creating what Holm called 'an existential threat' to his company. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up So he decided to join four other US businesses in filing a lawsuit challenging the legality of those tariffs, which Advertisement 'To have the best chance of survival was to join up here,' Holm told the Globe, noting the high tariffs Trump slapped on China added nearly $50 to the cost of a Caicos short. He was forced to pass most of that cost onto his customers, hiking the retail price to $199.95 from an anticipated $165. 'When you're up against the wall ...there was no hesitancy for me personally because as president I knew it was the best path forward for our company to have our best footing,' Holm said of joining the lawsuit against Trump. Advertisement In the suit filed by the Liberty Justice Center, a libertarian public interest law firm, and a second one filed by 12 Democratic state attorneys general, the US Court of International Trade Wednesday ruled Trump's tariffs are illegal. The ruling, which is a blow to Trump's aggressive trade policy, was then temporarily halted by the US Court of Appeals for the Federal Circuit and could ultimately be decided by the Supreme Court. White House officials have said they believe Trump's tariff authority ultimately will be upheld. But Holm remains optimistic the courts will quash the higher levies. 'We're a small company dealing with global supply chain disruptions and rising costs caused by these tariffs that shouldn't have been in there in the first place,' he said. The ruling helps him believe that 'we're going to come through have better clarity on the other side.' Nik Holm, president of Terry Precision Cycling. (Terry Precision Cycling) Terry Precision Cycling There's been little clarity up to this point. The 16-employee company has scrambled to keep up with Trump's constant changes to tariff rates while trying to find alternative sources for the unique materials in its products. 'We haven't been working on innovation the last couple of months,' he said. 'We've been working on tariff mitigation and sourcing products from other channels.' Holm declined to say who he voted for in the 2024 election, but said his politics weren't involved in the decision to join the suit. 'This wasn't a political move in the sense that we were going after the Trump administration,' he said. 'We were going after the survival... of our company.' Advertisement Terry Precision Cycling is located in progressive Burlington, but its customers are from around the country and Holm said there has been some backlash in the chat section of its website for joining the lawsuit. 'That's even more of a reason that we need to stick our neck out there because somebody has to do it,' Holm said. The company is used to paying tariffs. Even before Trump took office in January, the base tariff rate on its imported biking tops was 32 percent, Holm said. But the dramatically increases from Trump were an unforeseen hit. Holm said he started the year targeting $50,000 in operating income. The tariffs have added $45,000 to his costs. And if they stay in place, the hit will be $1.2 million next year. 'That just would not be sustainable,' he said. " And obviously all that would have to be somehow passed to the consumer or adjusted supply chains." But adjusting supply chains in such a specialized business and doing more domestic manufacturing is not easy. One of the company's product lines used to be made in the United States, but the manufacturer couldn't find enough workers to do the sewing so production moved to China, Holm said. And even for the products Terry Precision Cycling makes in Spokane, all the high-end fabrics they use come from abroad. 'El Salvador, China, Italy, a number of European countries mills that just don't exist in this country,' he said. The K-L Manufacturing facility in Spokane, Wash., which makes products for Terry Precision Cycling of Burlington, Vt. (Terry Precision Cycling) Terry Precision Cycling Trump has said the tariffs are designed to bring more manufacturing back to the United States. But Holm said it would take years to develop factories that can produce those materials domestically. Advertisement 'That would take quite some time and quite some investment in infrastructure and... some incentives to build out [to produce] the fabric and chamois and elastic and zippers and everything that goes into the garments we build,' he said. 'That would be a big feat for the country to do, to say, 'Hey, we're going to make this all in the United States.' ' And were that even possible, the cost of domestically-produced materials would be much higher., Holm said. The lower cost of its goods from China has helped offset the higher cost of manufacturing others in Spokane, he said. Doing it all in the United States would mean substantial price increases for consumers. In the meantime, Holm has been trying to find ways to reduce the cost of the tariffs. 'We look at our Philippine supplier and say, 'What else can you do? Can you do more to take away from the Chinese made goods?' ' he said. One of his Chinese manufacturers is building a factory in Cambodia, but Trump increased tariffs on that country as well. Like many US businesses, Terry Precision Cycling is just trying to keep its head above water as the tariff issue plays out in court and in negotiations between the Trump administration and foreign trading partners. 'It's a lot of uncertainty for sure,' Holm said. 'We and everybody else are stuck between a rock and a hard place currently.' Jim Puzzanghera can be reached at
Chicago Tribune
13 hours ago
- Politics
- Chicago Tribune
Federal judge dismisses suit that threatened wetlands on farmland nationwide
A federal judge in Iowa dismissed a lawsuit on Thursday that threatened millions of acres of wetlands, ecosystems that mitigate flooding, reduce water pollution and support biodiversity. While the lawsuit implicated wetlands nationwide, the battleground was a 72-acre farm in Delaware County, Iowa, owned by Chicago-based investor James Conlan. Conlan has over 1,000 acres of farmland in Iowa, which he leases to farmers who work the land. In some cases, he aims to eventually sell the land to developers. Represented by the libertarian Pacific Legal Foundation and Liberty Justice Center, Conlan argued that a federal provision colloquially known as Swampbuster, which discourages farmland owners from converting wetlands into cropland, infringes on property rights. Conlan and his lawyers did not respond to requests for comment following the decision, which detailed how his gripe with Swampbuster originated three years ago when he sought to cut down trees on 9 of his 72 acres federally designated as wetlands. Under the law, this would have made him and the farmer who leases the land ineligible for federal benefits such as subsidies, loans and insurance. The U.S. Department of Agriculture and several environmental and sustainable agriculture groups countered that compliance with Swampbuster was voluntary. Farmers can drain and till wetlands, but if they do, they cannot expect to receive taxpayer dollars. An expectation of land stewardship is central to the partnership between farmers and the public, said Aaron Lehman, a fifth-generation farmer and president of the Iowa Farmers Union, one of the several groups that joined with the federal government in the case. 'Thursday's decision means we can continue to have farm programs that have integrity,' he said Friday afternoon as he planted soybeans on his farm in Polk County, Iowa. Swampbuster protects 78 million acres, or two-thirds of the wetlands remaining in the continental U.S., according to Food and Water Watch, another group that joined the case in support of Swampbuster. In the upper Midwest, 30 million acres of wetlands, including over 640,000 in Iowa and 1 million in Illinois, are at risk of being destroyed by industrial agriculture, according to a study by the Union of Concerned Scientists. Over half the nation's original wetlands have already been destroyed by farming, development and climate change since the 1780s. 'Every day Americans, and especially homeowners — they might not even know about this case — but it was a big win for them. Wetlands in the Midwest and across the country provide billions of dollars in mitigation benefits by preventing people from losing their homes due to floods,' said Katie Garvey, an attorney at the Chicago-based Environmental Law and Policy Center who represented the environmental and sustainable agriculture groups. Wetlands are natural sponges and filters, absorbing excess water to prevent flooding and catching pollutants before they run into local waterways. They are also critical habitats for a variety of plants and animals. Garvey and her colleagues were pleasantly surprised by the Agriculture Department's continued defense of Swampbuster under the Trump administration. The lawsuit was originally filed under the Biden administration. 'We've been very relieved to see that this administration is continuing to support the USDA and defend Swampbuster,' she said. Chief Judge C.J. Williams, who presided over the case, was also appointed to the Northern Iowa District Court by President Donald Trump during his first term. 'I think that part of the reason is that these programs are really popular with farmers and with Trump's base,' said Dani Replogle, a staff attorney with Food and Water Watch. 'I wonder if that is maybe contributing to them being a little bit more cautious with programs that benefit farmers and benefit farming more broadly?' Lehman warned that the alternative to the voluntary Swampbuster program is a total regulatory environment where farmers don't have choice on whether to comply with conservation programs. 'The only other options would be neglecting the environment or a total regulatory environment, which would be difficult,' he said. The fight to over Swampbuster's fate — and the millions of wetlands it protects — isn't over yet, however. Conlan's team plans to appeal the decision to the 8th U.S. Circuit Court of Appeals based in St. Louis, according to a statement posted by the Liberty Justice Center on X Thursday evening. 'We're confident that the appellate court will ultimately rule that this federal law is unconstitutional. This law has been taking land from farmers for years, and we look forward to continuing to fight this unconstitutional law,' said the statement, which Conlan's lawyers referred the Tribune to, in lieu of an interview.
Wall Street Journal
13 hours ago
- Business
- Wall Street Journal
Where the Landmark Tariff Lawsuit Started
Victor Owen Schwartz is an unlikely face of tariff resistance. A small wine importer and distributor, Schwartz is the lead plaintiff in a lawsuit that was filed in April by the Liberty Justice Center, a libertarian legal group, to challenge President Trump's tariffs. Now the case is on appeal with huge implications for the global economy hanging in the balance. Read more on how the case started.
Yahoo
19 hours ago
- Business
- Yahoo
A Victory for Separation of Powers
Wednesday's unanimous ruling against President Donald Trump's expansive 'Liberation Day' tariffs by the United States Court of International Trade wasn't merely a victory for the businesses and consumers opposed to the policy. The decision was much more than that: a victory for the constitutional system of separation of powers—and, even more broadly, for the rule of law in America. The decision came in a case filed by the Liberty Justice Center and me on behalf of five American businesses harmed by the tariffs, and it also covers a similar case filed by 12 states led by Oregon. Our suit challenged Trump's attempted use of the International Emergency Economic Powers Act of 1977 to impose 10 percent Liberation Day tariffs on imports from almost every nation in the world, plus additional 'reciprocal' tariffs on many more countries. We argue that the IEEPA doesn't grant Trump the virtually unlimited tariff authority he claims, and that, if it did, it would be unconstitutional. Earlier, the president also used IEEPA to impose 25 percent tariffs on Canada and Mexico, plus additional tariffs on China, under the pretext that they would somehow curtail importation of fentanyl into the United States. (Our case challenged only the Liberation Day tariffs, while the Oregon case also targeted the fentanyl ones.) In combination, the IEEPA tariffs kicked off the biggest trade war since the Great Depression. The Tax Foundation estimated that Trump's IEEPA tariffs would have imposed some $1.4 trillion to $2.2 trillion in tax increases on Americans over the next decade. They also would have severely slowed economic growth, inflicted grave harm on many businesses—including our clients, who depend on imports—and raised prices on consumers. Fortunately, the court ruled that Trump does not have the 'unbounded authority' he claims 'to impose unlimited tariffs on goods from nearly every country.' The British overthrew King Charles I in part because he tried to impose 'ship money' taxes without legislative authorization. The president of the United States is no king, and he does not have the power to impose taxes in the form of tariffs whenever he feels like it. The court's decision upholds this fundamental principle of the Anglo-American constitutional tradition. The IEEPA doesn't even mention tariffs as one of the emergency powers it grants the president. No previous president ever used it to impose them. In addition, the law can be invoked only to address a 'national emergency' that amounts to an 'unusual and extraordinary threat' to America's economy or national security. The administration claimed that the president has unlimited discretion to decide what qualifies as an 'emergency' and an 'unusual and extraordinary threat.' Thus, the Liberation Day tariffs were supposedly justified by the existence of trade deficits with various countries, even though such deficits have persisted for decades; there is nothing 'unusual' about them; and, as most economists recognize, they are not a threat at all. As Judge Jane A. Restani put it during oral argument, the administration's approach would allow the president to impose sweeping tariffs for virtually any 'crazy' reason, such as a peanut-butter shortage. [Conor Friedersdorf: Striking down Trump's tariffs isn't a judicial coup] The court ruled that the 'IEEPA requires more than just the fact of a presidential finding or declaration,' because 'it does not grant IEEPA authority to the President simply when he 'finds' or 'determines' that an unusual and extraordinary threat exists.' Otherwise, he would have virtually unlimited tariff authority, which the Congress that enacted the IEEPA carefully sought to prevent. The court also emphasized that 'the Constitution assigns Congress the exclusive powers to lay and collect Taxes, Duties, Imposts and Excises' and to 'regulate Commerce with foreign Nations.' For that reason, 'any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional.' It would 'constitute an improper abdication of legislative power to another branch of government.' The Supreme Court has been relatively lax in enforcing what is called the 'nondelegation doctrine,' which limits the extent to which congressional authority can be delegated to the executive. But both conservative and liberal justices have held that there must be at least some limits to delegation. And if anything qualifies as excessive delegation, it would be a transfer of unlimited power to impose tariffs amounting to trillions of dollars in tax increases. The court ruling also cites the 'major-questions doctrine,' which requires Congress to 'speak clearly' when authorizing the executive to make 'decisions of vast economic and political significance.' According to the major-questions doctrine, if the law isn't clear, courts must reject the executive's assertions of power. If Trump's sweeping use of the IEEPA is not a major question, nothing is. The magnitude of the IEEPA tariffs exceeds that of any of the measures ruled to be 'major questions' by the Supreme Court. Not even President Joe Biden's $400 billion student-loan-forgiveness plan (which the Court in my view rightly invalidated under the doctrine) compares. And, as the Court of International Trade decision explains, it is anything but clear that the IEEPA grants Trump the immense authority he claims; indeed, it clearly does not. The nondelegation and major-questions doctrines are related, but distinct. The former categorically bans excessive delegations of legislative power to the executive because they undermine the constitutional separation of powers, while the latter merely requires that broad delegations be clearly indicated by Congress. In combination, they aim to constrain executive power grabs, such as that attempted here by Trump. In addition to vindicating constitutional principles, the decision is a win for the rule of law. Major legal rules should be clearly stated, and not instantly changeable at one person's whim. That is what differentiates the rule of law from the 'rule of men.' Trump's claim to unlimited tariff authority and his repeated gyrations in imposing and lifting tariffs are a blatant affront to this principle. After imposing the Liberation Day tariffs, he soon suspended them for certain electronic goods, struck an ad hoc temporary deal to suspend some tariffs on China, and then proceeded to threaten new tariffs on such products as foreign-produced movies and Apple iPhones. Such one-man rule wreaks havoc on the rule of law—to say nothing of the stable legal environment that investors and businesses need to make plans. The court's ruling imposes a nationwide permanent injunction blocking the IEEPA tariffs, thus granting relief to all Americans, not just our clients. Still, the litigation is not over. The administration appealed the decision to the U.S. Court of Appeals for the Federal Circuit, asking it to stay the injunction in the meantime. Yesterday, that court granted a brief 'administrative stay' that delays the ruling for a few days as the parties litigate the issue of whether a longer stay should be granted. The case may yet reach the Supreme Court. A second decision against Trump's IEEPA tariffs was issued yesterday by Judge Rudolph Contreras of the federal District Court for the District of Columbia. Unlike the Court of International Trade ruling, it applies only to tariffs imposed against the two toy manufacturers that brought the case. But notably, Contreras concluded that the IEEPA doesn't grant the president the power to impose tariffs at all, thereby going further than the Wednesday decision did. If the law did grant the sweeping authority claimed by Trump, Contreras—like the Court of International Trade panel—noted, that would be an unconstitutional delegation of legislative power, and 'render IEEPA unconstitutional.' While the impact of the district-court ruling is very limited, it further bolsters the case against Trump's tariffs. The legal fight over the IEEPA tariffs will continue. But these decisions make me guardedly optimistic. The Court of International Trade ruling was joined by judges appointed by both Republican and Democratic presidents, including one (Timothy M. Reif) appointed by Trump. Judge Restani was appointed by Ronald Reagan, and the third judge who joined the decision, Gary S. Katzmann, was appointed by Barack Obama. This shows that the legal case against these sorts of sweeping, unilaterally imposed tariffs cuts across liberal-conservative lines. The nondelegation and major-questions doctrines on which our case—and this decision—are largely based have been championed by conservative Supreme Court justices. Americans across the political spectrum have an interest in preventing the president from wielding monarchical powers, undermining the Constitution, and starting ruinous trade wars. It's good to see that courts seem to agree. Article originally published at The Atlantic
Atlantic
21 hours ago
- Business
- Atlantic
A Victory for Separation of Powers
Wednesday's unanimous ruling against President Donald Trump's expansive 'Liberation Day' tariffs by the United States Court of International Trade wasn't merely a victory for the businesses and consumers opposed to the policy. The decision was much more than that: a victory for the constitutional system of separation of powers—and, even more broadly, for the rule of law in America. The decision came in a case filed by the Liberty Justice Center and me on behalf of five American businesses harmed by the tariffs, and it also covers a similar case filed by 12 states led by Oregon. Our suit challenged Trump's attempted use of the International Emergency Economic Powers Act of 1977 to impose 10 percent Liberation Day tariffs on imports from almost every nation in the world, plus additional 'reciprocal' tariffs on many more countries. We argue that the IEEPA doesn't grant Trump the virtually unlimited tariff authority he claims, and that, if it did, it would be unconstitutional. Earlier, the president also used IEEPA to impose 25 percent tariffs on Canada and Mexico, plus additional tariffs on China, under the pretext that they would somehow curtail importation of fentanyl into the United States. (Our case challenged only the Liberation Day tariffs, while the Oregon case also targeted the fentanyl ones.) In combination, the IEEPA tariffs kicked off the biggest trade war since the Great Depression. The Tax Foundation estimated that Trump's IEEPA tariffs would have imposed some $1.4 trillion to $2.2 trillion in tax increases on Americans over the next decade. They also would have severely slowed economic growth, inflicted grave harm on many businesses—including our clients, who depend on imports—and raised prices on consumers. Fortunately, the court ruled that Trump does not have the 'unbounded authority' he claims 'to impose unlimited tariffs on goods from nearly every country.' The British overthrew King Charles I in part because he tried to impose 'ship money' taxes without legislative authorization. The president of the United States is no king, and he does not have the power to impose taxes in the form of tariffs whenever he feels like it. The court's decision upholds this fundamental principle of the Anglo-American constitutional tradition. The IEEPA doesn't even mention tariffs as one of the emergency powers it grants the president. No previous president ever used it to impose them. In addition, the law can be invoked only to address a 'national emergency' that amounts to an 'unusual and extraordinary threat' to America's economy or national security. The administration claimed that the president has unlimited discretion to decide what qualifies as an 'emergency' and an 'unusual and extraordinary threat.' Thus, the Liberation Day tariffs were supposedly justified by the existence of trade deficits with various countries, even though such deficits have persisted for decades; there is nothing 'unusual' about them; and, as most economists recognize, they are not a threat at all. As Judge Jane A. Restani put it during oral argument, the administration's approach would allow the president to impose sweeping tariffs for virtually any 'crazy' reason, such as a peanut-butter shortage. The court ruled that the 'IEEPA requires more than just the fact of a presidential finding or declaration,' because 'it does not grant IEEPA authority to the President simply when he 'finds' or 'determines' that an unusual and extraordinary threat exists.' Otherwise, he would have virtually unlimited tariff authority, which the Congress that enacted the IEEPA carefully sought to prevent. The court also emphasized that 'the Constitution assigns Congress the exclusive powers to lay and collect Taxes, Duties, Imposts and Excises' and to 'regulate Commerce with foreign Nations.' For that reason, 'any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional.' It would 'constitute an improper abdication of legislative power to another branch of government.' The Supreme Court has been relatively lax in enforcing what is called the 'nondelegation doctrine,' which limits the extent to which congressional authority can be delegated to the executive. But both conservative and liberal justices have held that there must be at least some limits to delegation. And if anything qualifies as excessive delegation, it would be a transfer of unlimited power to impose tariffs amounting to trillions of dollars in tax increases. The court ruling also cites the 'major-questions doctrine,' which requires Congress to 'speak clearly' when authorizing the executive to make 'decisions of vast economic and political significance.' According to the major-questions doctrine, if the law isn't clear, courts must reject the executive's assertions of power. If Trump's sweeping use of the IEEPA is not a major question, nothing is. The magnitude of the IEEPA tariffs exceeds that of any of the measures ruled to be 'major questions' by the Supreme Court. Not even President Joe Biden's $400 billion student-loan-forgiveness plan (which the Court in my view rightly invalidated under the doctrine) compares. And, as the Court of International Trade decision explains, it is anything but clear that the IEEPA grants Trump the immense authority he claims; indeed, it clearly does not. The nondelegation and major-questions doctrines are related, but distinct. The former categorically bans excessive delegations of legislative power to the executive because they undermine the constitutional separation of powers, while the latter merely requires that broad delegations be clearly indicated by Congress. In combination, they aim to constrain executive power grabs, such as that attempted here by Trump. In addition to vindicating constitutional principles, the decision is a win for the rule of law. Major legal rules should be clearly stated, and not instantly changeable at one person's whim. That is what differentiates the rule of law from the 'rule of men.' Trump's claim to unlimited tariff authority and his repeated gyrations in imposing and lifting tariffs are a blatant affront to this principle. After imposing the Liberation Day tariffs, he soon suspended them for certain electronic goods, struck an ad hoc temporary deal to suspend some tariffs on China, and then proceeded to threaten new tariffs on such products as foreign-produced movies and Apple iPhones. Such one-man rule wreaks havoc on the rule of law—to say nothing of the stable legal environment that investors and businesses need to make plans. The court's ruling imposes a nationwide permanent injunction blocking the IEEPA tariffs, thus granting relief to all Americans, not just our clients. Still, the litigation is not over. The administration appealed the decision to the U.S. Court of Appeals for the Federal Circuit, asking it to stay the injunction in the meantime. Yesterday, that court granted a brief 'administrative stay' that delays the ruling for a few days as the parties litigate the issue of whether a longer stay should be granted. The case may yet reach the Supreme Court. A second decision against Trump's IEEPA tariffs was issued yesterday by Judge Rudolph Contreras of the federal District Court for the District of Columbia. Unlike the Court of International Trade ruling, it applies only to tariffs imposed against the two toy manufacturers that brought the case. But notably, Contreras concluded that the IEEPA doesn't grant the president the power to impose tariffs at all, thereby going further than the Wednesday decision did. If the law did grant the sweeping authority claimed by Trump, Contreras—like the Court of International Trade panel—noted, that would be an unconstitutional delegation of legislative power, and 'render IEEPA unconstitutional.' While the impact of the district-court ruling is very limited, it further bolsters the case against Trump's tariffs. The legal fight over the IEEPA tariffs will continue. But these decisions make me guardedly optimistic. The Court of International Trade ruling was joined by judges appointed by both Republican and Democratic presidents, including one (Timothy M. Reif) appointed by Trump. Judge Restani was appointed by Ronald Reagan, and the third judge who joined the decision, Gary S. Katzmann, was appointed by Barack Obama. This shows that the legal case against these sorts of sweeping, unilaterally imposed tariffs cuts across liberal-conservative lines. The nondelegation and major-questions doctrines on which our case—and this decision—are largely based have been championed by conservative Supreme Court justices. Americans across the political spectrum have an interest in preventing the president from wielding monarchical powers, undermining the Constitution, and starting ruinous trade wars. It's good to see that courts seem to agree.
