Cycling apparel shop challenges Trump’s tariffs in Supreme Court

BURLINGTON, Vt. (AP) — From the moment Donald Trump was president. customs duties imposed In almost every country, Nick Holm feared that the company he led would not survive.

For 40 years, Terry Precision Cycling has weathered tough early markets, thin profit margins, and pandemic-era booms and busts with its women’s-focused product line. But company president Holm wasn’t sure how his business would be able to pay the tariffs in the first place. announced in April And keep doing business.

“We felt like we were up against a wall,” he said of his reason for joining the case challenging the tariffs, which the Supreme Court is scheduled to hear next week.

Terry Precision Cycling’s office is located behind a coffee shop in Burlington, Vermont, facing a leafy street that changes color in the fall. Local accolades share wall space with bicycle saddles and color wheels worth of fabric samples. Orders are shipped from a warehouse several miles away.

This seems an unlikely epicenter for the uproar over President Trump’s tariffs that is unfolding on the trading floors of global market exchanges and in the boardrooms of international corporations.

But Terry Precision Cycling is one of a handful of small businesses challenging many of President Trump’s tariffs before the Supreme Court on Wednesday in a case that has outsized implications for the limits of presidential power and the global economy.

Small businesses will be hit hard

Although the company is small, we work with suppliers all over the world. We sell cycling shorts made in the United States using materials imported from France, Guatemala, and Italy. Its signature colorful print bike jerseys are made from high-tech materials that can’t be found outside of China.

Tariffs mean the company has to pay more for all these imports, and without the cash reserves of a large company, it has little choice but to raise prices for its customers to make up the shortfall. A rapidly changing pace Change of pricePricing has become a roll of the dice, especially for products from China. “How do I play if I don’t know the rules of the game?” Holm asked.

When tariffs from China reached 145%, the company had to add $50 to each pair of shorts in the pipeline, bringing the price to $199. “If you specify the cost, you can specify the price. Then you can go back and see who can actually afford it,” Holm said.

Other companies in his lawsuit are small businesses, including a plumbing supply company in Utah, a wine importer in New York and a fishing tackle manufacturer in Pennsylvania.

Holm started working for the company more than 10 years ago and started cycling seriously on the side. He often rides his bike to work and has one standing outside his office with the company’s designers and salespeople. Holm, a lanky man with deep-set eyes and side-parted hair, was appointed president about two years ago as the company, founded by women’s cycling pioneer Georgina Terry, was suffering from a downturn in the outdoor market following the coronavirus pandemic. His usually calm demeanor comes alive when he talks about the design of his padded shorts and the SPF protection level of his jersey.

“It’s all about fit and functionality and safety and comfort,” he says. “That’s our foundation, getting people together, getting women together, getting them on bikes. Let’s get them on their bikes more, let’s get them out and about.”

The companies challenging President Trump’s tariffs are represented by the Liberty Justice Center, a libertarian-leaning legal group that typically aligns with conservative causes. But they argue that Trump is wrong about sweeping tariffs, which are expected to collect about $3 trillion from businesses over the next decade, according to the Congressional Budget Office.

They argue that no other president has used the Emergency Powers Act, which doesn’t even mention tariffs, to assert near-unlimited authority to impose and change import tariffs at will, but on such a large scale.

“This is, in effect, what was at stake in the American Revolution, the principle that no tax is legal unless it is adopted by the people’s representatives,” said Jeffrey Schwab, an attorney with the Liberty Justice Center.

President Trump calls this incident one of the most important for the country.

The Trump administration said the law would allow the president to regulate imports, including tariffs. The president has been vocal about the issue, hinting at the possibility of taking the stand himself at some point, something that no other sitting president has on record. “This is one of the most important cases in our nation’s history, because if we don’t win this case, our country will be weakened and financially disrupted for years to come,” he said.

The law President Trump used for many of his tariffs, the International Emergency Economic Powers Act, has been invoked dozens of times over the past few decades to impose sanctions on other countries.

But no president had used it for tariffs until February, when Trump imposed tariffs on China, Mexico and Canada. He said countries were not doing enough to stop illegal immigration and drug trafficking.

In April, he announced “reciprocal” tariffs on nearly all of the United States’ trading partners, with a baseline of 10% and higher increases for certain countries, many of which have since been put on hold. Tariffs on China at one point reached 145%, but have since been lowered and are expected to reach a total of 20% under the Trump administration. Latest agreement with China.

Multiple lawsuits have been filed over emergency power charges. The Supreme Court is also scheduled to hear two other lawsuits Wednesday, one from a group of Democratic-leaning states and the other from an Illinois educational toy company.

The plaintiff won the second round. lower courtBut the government persuaded four appellate judges that the law gives the president broad authority over tariffs.

What decision the Supreme Court will make is an open question.

The high court will now be asked to rule on the scope of the president’s powers. Three of the justices were appointed by President Trump, but so far they have been reluctant to check the president’s unusually flexible executive powers.

But they have been skeptical of presidential assertions of power before, such as when Joe Biden tried to forgive $400 billion in student loans under another law addressing a national emergency. The court found that the law did not specifically authorize Biden to enact such a costly plan.

By contrast, President Trump’s tariffs are expected to total trillions of dollars. It’s also predicted that people’s bills will increase by about $2,000 per household this year. analysis Found at Yale University’s Institute for Budget Research.

Revenues from the tariffs totaled $195 billion by September, more than double from a year earlier, but the government could have to pay back the money if a judge cracks down on the tariffs.

President Trump acknowledged that Americans may experience short-term pain from the tariffs, but argued that they would result in more favorable trade deals and support U.S. manufacturing. The administration has said the tariffs are different from Biden’s student loan case because they are about foreign policy and courts should not second-guess the president.

But for the folks at Terry Precision Cycling, these big-picture political issues were far removed from their decision to join the lawsuit. Holm thought more about the company’s 20 or so employees, its heritage and the women who buy its products because of their love of cycling.

“When cycling becomes so unaffordable, fewer people have access to the joy and freedom of riding,” he says. “It was important to survive this uncertainty.”