Companies discover a potential way to avoid Trump’s tariffs and keep prices low
The Trump Tariff Saga
Donald Trump’s tariff regime has been the subject of much controversy, with critics calling it “crazy” and “nonsensical.” Despite the backlash, the White House is standing firm on its unconventional program. The tariffs, which involve taxes on imports for U.S. companies, reportedly bring in billions of dollars in monthly revenue for the federal government. However, many companies are not happy with it, and now several lawsuits threaten to force the government to refund most of the money collected through Trump’s tariff program.
Legal Challenges and Potential Repercussions
There are two cases challenging the White House’s legal argument to justify its tariff program. The argument invokes the International Emergency Economic Powers Act of 1977, originally created for “extraordinary and unusual threat” circumstances to the nation. The law gives the president certain powers that he wouldn’t have otherwise, but courts are debating whether Trump’s actions fall under that law.
The cases questioning Trump’s policy involve a trade association representing importers and 12 Democratic states that argue the government’s actions are illegal. If the government’s tariffs are deemed illegitimate, affected importers believe they are entitled to a refund, which the government acknowledges. If the refunds go through, Customs and Border Protection will likely process them. This could mean a significant blow to the revenue generation plan, which partially offset Trump’s tax cuts.
The Current Situation
Things are not looking good for the White House at the moment. In May, a federal court ruled that Trump’s tariffs exceeded the presidential authority granted under the 1977 emergency law. Another District Court ruling upheld the tariffs for two small businesses.
While both decisions were later suspended, keeping the tariffs in place until the litigation concludes its journey through the federal court system, most experts believe it will eventually reach the Supreme Court.
A source close to the White House told the news outlet: “Two courts have already ruled decisively against the tariffs, so the idea that it’s a slam dunk isn’t holding up. There’s more than a 50-50 chance this could go against them.”
A White House spokesperson responded to Gizmodo, saying: “The government is using the powers granted by the Constitution and Congress to impose tariffs fairly and lawfully to level the playing field for American workers and safeguard our national security.”
This article has been translated from Gizmodo US by Lucas Handley. You can find the original version here.
