On May 28, a federal court delivered a verdict, decreeing that the unprecedented 10 percent tariffs imposed on almost all nations globally by former President Donald J. Trump had exceeded his legal authority, a move that could potentially escalate the price tag of imported wine bottles in U.S. shops and dining establishments. A team of three judges from a U.S. Court of International Trade, located in Manhattan, passed a stay order on the broad-spanning tariffs introduced by Trump on the grounds of urgent economic necessity.
The tariff impositions halted by the court not only included the ‘Liberation Day’ tariffs announced on April 2 but also the ones introduced earlier in the year against nations like China, Mexico and Canada with aims of preventing fentanyl from making its way into the United States.
Subsequently, a federal appeal court acceded to a request originated by Trump’s Administration and decided to put a temporary hold on the ruling of the lower court. This move would ensure the continuity of the levied tariffs during the time the White House takes to appeal the decision.
There is the possibility that the case could be escalated to the Supreme Court. The plaintiff in this case is a small wine importing company based in New York – VOS Selections.
Victor Schwartz, the founder of VOS, painted this court ruling as a success for his venture as well as for many similar small businesses in the United States, and across the globe. In his words, ‘We are aware of the appeal already filed, and we firmly believe in our lawsuit and will see it all the way through to the United States Supreme Court.’
In addition to VOS, four other small businesses stood as challengers to the White House’s decision to use the International Emergency Economic Powers Act (IEEPA) to enforce these tariffs. These businesses were legally represented by the Liberty Justice Center. The law from 1977 provides extensive powers to the U.S. president, allowing them to manage financial transactions after declaring a state of national emergency. However, the law does not explicitly authorize the implementation of tariffs.
Another aspect of the legal argument points out that the White House fell short in proving an emergency situation. With regards to this, there is no previous instance where a president has utilized IEEPA as a legal backing for introducing tariffs.
Defending its stance, the Trump Administration vociferously conveyed that they would not back down without putting up a fight. The administration claimed that the decision-making power regarding national emergencies is not a privilege to be enjoyed by unelected judges. They reasoned that Trump had made a commitment to prioritize America, and the administrative body would use every possible executive power to resolve the crisis and restore America’s prominence.
Despite the court’s ruling, the appellate court has decided to postpone the execution of the decision during the appeal process. If the ruling is subsequently uphold, it would not only result in the termination of the tariffs but would also potentially allow businesses who have paid these tariffs to be eligible for refunds.
VOS Selections, the leading plaintiff in this case, was established by Schwartz back in 1987 and is currently managed with the help of his daughter, Chloe Schwartz. They import and distribute a range of wines hailing from small producers based in countries such as France, Italy, and Spain amongst others.
Schwartz, like a lot of small importers, had his share of struggles with tariffs during the first term of the Trump Administration, but with the most recent round of duties, he argues that small businesses such as his are unable to bear the financial burden.
The prevailing uncertainty due to the stay order continues to trouble many wine importers. Since the onset of this year, they have been in a state of doubt about the extent of these tariffs and how long they would have to endure them.
Currently, discussions are underway between the White House and various nations. The future remains unclear, as if, by July 9, no agreements are reached, wines imported from the European Union would face tariffs that could be as high as 20 percent, if not more.