Legal representatives of a group of small businesses challenging President Donald Trump’s reciprocal tariffs at the Court of International Trade argue that the administration’s tariff pause undermines its claim that the new duties are necessary to remedy an economic emergency.
The president declared an economic emergency in his April 2 executive order, arguing that a “large and persistent” U.S. trade deficit poses a threat to the nation’s economy and national security. Trump has since paused all the country-specific tariffs announced that day, including, as of this week, those placed on China, leaving only a 10% baseline rate in effect.
“There's a 90-day pause on retaliatory tariffs. There's a carveout for specific products,” Jeffrey Schwab, senior counsel at the Liberty Justice Center, a conservative public interest legal group, said during oral arguments before the court on Tuesday.
“That doesn't gel with the justification,” Schwab said.
The case is just one of at least seven making their way through U.S. courts that challenge the legality of Trump’s second-term tariffs.
Liberty Justice Center attorneys – who are representing five small businesses hurt by the tariffs, including a wine distributor – are seeking both a preliminary injunction to halt the tariffs while legal proceedings play out and a summary judgement to bring a swift end to the case.
The CIT has already rejected the group's previous petition for a temporary restraining order.
The case hinges, in part, on whether the trade deficit constitutes an “unusual and extraordinary threat,” the threshold required to justify presidential actions under the International Emergency Economic Powers Act, as well as whether tariffs are acceptable responses under IEEPA.
Schwab argued before the three-judge CIT panel that the U.S. has had a trade deficit for decades, suggesting there is nothing “unusual or extraordinary” about the current circumstances that would constitute an economic emergency.
Further, Schwab maintains there is nothing in IEEPA that allows the president to use tariffs to remedy an emergency. The constitution gives Congress oversight over U.S. tariff policy and, Schwab argued, would have to explicitly delegate this authority to the president.
“I've been teaching constitutional law for over 20 years, and I've never seen a power grab as brazen and large scale as this one,” co-counsel Ilya Somin told reporters after the hearing.
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Multiple former GOP officials and lawmakers, including Sens. George Allen of Virginia, John Danforth of Missouri and Chuck Hagel of Nebraska signed on to an amicus brief last month endorsing the argument that IEEPA doesn't authorize the use of tariffs.
But Eric Hamilton, who represents the Department of Justice in the case, disagreed on both counts. He insisted that the U.S. trade deficit has a “cumulative” effect, and that economic threats compound over time. He also argued that many of the risks of running such a large and persistent trade deficit were only exposed during the supply chain turmoil of the pandemic, justifying the novel emergency declaration.
Hamilton also pointed to language in the IEEPA statute says the president can “regulate” trade, which, he says, would include levying tariffs.
The CIT does not have a deadline, but Schwab told reporters after the hearing that he expects a decision on the injunction within a week. A separate case brought by 12 states challenging four of the president’s tariff executive orders has oral arguments scheduled for next Wednesday, so Schwab said it’s possible the court could wait and rule on the two cases together.
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