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Small Businesses Gear Up for Tariff Fight at Supreme Court

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Companies that sell diamonds, plant sensors and wine all have one thing in common: They are weighing in against tariffs in a consequential case.EarthQuaker Devices, a manufacturer of musical instruments in Akron, Ohio, uses more than 900 components from over 15 countries to make products that alter the sound of guitars, with names like “Tentacle,” “Rainbow Machine” and “Gary.”The tariffs that President Trump imposed on nearly all trading partners have drastically increased the cost of those components. But EarthQuaker is hoping that the tariff case the Supreme Court plans to hear on Wednesday will render those taxes moot.The company has spent hours searching for U.S. suppliers that would allow it to avoid paying the tariffs. The president, citing an emergency law, has slapped tariffs on more than 100 countries this year in an attempt to reduce the trade deficit and force more manufacturing to the United States. But EarthQuaker found that parts available domestically were 20 to 30 times the price of foreign ones. There has been no sign that tariffs will encourage suppliers to set up U.S. factories to make their goods instead, the company said.“We have spent many hours of wasted time and energy searching for solutions which do not exist,” said Julie Robbins, EarthQuaker’s chief executive. The company paid the U.S. government more than $40,000 in tariffs this year, and sales revenue dropped by 10 percent, she said.EarthQuaker is one of hundreds of small businesses that say they are suffering as a result of Mr. Trump’s tariffs on imports. Many of them have waded into an unfolding legal clash to make that case. On Wednesday, the Supreme Court will begin considering the president’s sweeping use of emergency powers to issue tariffs. Legal experts say the case is a tossup, but it has significant implications for U.S. businesses, whose fortunes are being shaped by policy set in Washington.Mr. Trump used the emergency authority, called the International Emergency Economic Powers Act, to swiftly raise and lower tariffs on dozens of trading partners. In briefings submitted to the court last week, EarthQuaker and other small businesses argued that those decisions had hammered their bottom lines, forcing some to cut prices, lay off workers or otherwise upend their plans. The argument clashed with Mr. Trump’s repeated assertions that tariffs have not harmed U.S. businesses, workers or consumers.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    In Search of Trade Deal, Philippines’ Leader Will Meet With Trump

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    President Trump has placed a 20 percent tariff on goods imported from the country, effective Aug. 1.President Trump is set to meet at the White House on Tuesday with President Ferdinand Marcos Jr. of the Philippines, who is seeking to leverage his country’s close relationship with the United States to secure a more favorable trade deal.Mr. Trump plans to host Mr. Marcos for lunch. The Trump administration fell well short of its goal of securing 90 trade deals in 90 days by early July, negotiating only a handful. The White House says that it has, so far, reached framework agreements with Britain, Vietnam and Indonesia, plus a trade truce that rolled back tariffs with China.Mr. Trump has threatened higher tariffs on dozens of countries as of Aug. 1, including the Philippines, which he said would receive a 20 percent tariff. Many global leaders have been negotiating with the Trump administration in an effort to lower those tariffs further.Before leaving for the United States, Mr. Marcos said his primary goal was to make sure that trade between the two nations was strong.“My top priority for this visit is to push for greater economic engagement, particularly through trade and investment between the Philippines and the United States,” he said. “I intend to convey to President Trump and his cabinet officials that the Philippines is ready to negotiate a bilateral trade deal that will ensure strong, mutually beneficial and future-oriented collaborations that only the United States and the Philippines will be able to take advantage of.”A statement from the White House said the meeting between Mr. Trump and Mr. Marcos would focus on a “shared commitment to upholding a free, open, prosperous and secure Indo-Pacific and advancing shared economic prosperity.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Announces ‘Great Deal’ on Trade With Indonesia

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    President Trump said the agreement would partly walk back some of the steep tariffs he threatened on the country last week. Indonesia’s president called Mr. Trump a “tough negotiator.”Indonesia’s president, Prabowo Subianto, confirmed on Wednesday the broad outlines of a trade agreement with the United States that was reached after what he called “tough negotiations” with Washington.Under the terms, which President Trump on Tuesday called a “great deal for everybody,” U.S. exports to Indonesia would face no tariffs, while Indonesian goods would be charged a tariff of 19 percent in the United States.Mr. Prabowo confirmed in brief remarks in Jakarta that the two nations had “finally” reached an agreement. “We understand their interests, and they understand ours,” he added.The announcement comes as the Trump administration is trying to close trade deals with numerous countries, and threatening to impose double-digit tariffs on the exports of two dozen nations as of Aug. 1 if agreements aren’t reached.U.S. and Indonesian officials have been engaged in trade talks for several months. Last week, Mr. Trump threatened Indonesia with a 32 percent tariff on its exports in a letter posted to his social media account, as he sent similar form letters to dozens of countries. Indonesian officials said they were surprised to receive the letter, given that talks had been going well.“I think it’s a good deal for both parties,” Mr. Trump said, while saying that a forthcoming deal with India would also follow similar lines. He added that Indonesia also had minerals and “very high-quality copper, which we’ll be using.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Rising Inflation Underscores Risks in Trump’s New Tariff Threats

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    New data showing price increases last month could foreshadow even higher costs if the president imposes steep tariffs on Aug. 1.President Trump’s steep tariffs have started to weigh on consumers’ wallets, sending prices higher as the White House readies a more drastic — and potentially costly — expansion of its global trade war.The risks in Mr. Trump’s economic strategy began to show on Tuesday, with the release of data that found inflation had accelerated in June. Prices rose noticeably on appliances, clothing and furniture, products that are all heavily exposed to the president’s taxes on imports from Canada, China and other major trading partners.The inflation report undercut Mr. Trump’s continued assertions that Americans would not face financial repercussions from his increasingly aggressive trade brinkmanship. Since taking office, the president has imposed withering duties on allies and adversaries alike, with additional taxes on a range of products such as cars and steel.The latest reading of the Consumer Price Index recorded the first signs of what economists had predicted all along, with U.S. businesses and consumers shouldering a growing share of the burden from the taxes Mr. Trump has imposed on imports.The data also carried perhaps a new warning for the president as he prepares another round of tariffs on dozens of countries in about two weeks, including a 30 percent tax on the European Union. Some experts said that an uptick in inflation could foreshadow more significant price increases later, especially if Mr. Trump proceeds as planned.“Up until this report, you could have argued that inflation is on a journey lower,” said Padhraic Garvey, who leads ING’s research team for the Americas. “Now we are on a journey higher.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Adds 17% Tariff on Tomatoes From Mexico

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    The Trump administration is adding a 17 percent tariff to a year-round grocery store staple, while funneling more business to domestic tomato growers, largely in Florida.The Trump administration announced Monday that it would impose a 17 percent tariff on most imports of tomatoes from Mexico, as it withdrew from a decades-old trade agreement that had prevented those levies from snapping into place.The tariffs will add to the price of a year-round grocery store staple for many Americans, while funneling more business to domestic tomato growers, largely in Florida.The levies stem from a nearly 30-year-old trade case that found Mexican tomato growers to be selling their products in the United States at unfairly low prices. The U.S. tomato industry brought a case against their Mexican competitors in 1996, arguing that Mexican tomatoes dumped into the United States were injuring American growers. A U.S. trade court agreed with them, and ordered tariffs to be imposed.But on five occasions since then — in 1996, 2002, 2008, 2013 and 2019 — the United States agreed to suspend the tariffs, as long as Mexican growers would keep their prices above a certain minimum level. The United States and Mexico had been in recent talks about entering into a new agreement.“Mexico remains one of our greatest allies, but for far too long our farmers have been crushed by unfair trade practices that undercut pricing on produce like tomatoes,” Howard Lutnick, the secretary of commerce, said in a statement. “That ends today. This rule change is in line with President Trump’s trade policies and approach with Mexico.”The 17 percent duty is calculated to measure the percentage by which Mexican tomatoes have been sold in the United States at unfair prices, the Commerce Department said. The United States imported $2.8 billion of tomatoes from Mexico in 2023, according to data from the World Bank, representing more than 85 percent of American imports.The Fresh Produce Association of the Americas, which represents companies that import and sell produce and flowers, said it was “disappointed” in the decision. It said that its members distributed vine-ripened, greenhouse-grown tomatoes from Mexico that are not replaceable by tomatoes grown in Florida and the Southeast, most of which are grown in an open field, picked green and gassed to induce a color change.“As an industry, we are saddened that American consumers will have to pay a tomato tax, or duty, for a reduced selection of the tomatoes they prefer,” the group said.Robert Guenther, the executive vice president of the Florida Tomato Exchange, said that the previous five agreements with Mexico had failed, and that strong enforcement of U.S. trade laws was needed to protect “the stability of our food supply chain.”“This decision will protect hardworking American tomato growers from unfair Mexican trading practices and send a strong signal that the Trump administration is committed to ensuring fair markets for American agriculture,” he said. More

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    The Economy Has Been Resilient. The New Round of Tariffs May Hit Harder.

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    The economy’s resilience so far to President Trump’s global trade war risks emboldening him and unleashing the sort of economic devastation that economists have long feared.President Trump has had little reason to scale back his global trade war ambitions with inflation subdued, unemployment stable and U.S. stock markets back to record highs.But the latest escalation, including 30 percent levies on the European Union, could deliver a much more painful blow to the United States. If the tariffs go into effect on Aug. 1, they could unleash the sort of devastation to consumers and businesses that economists have long worried about and that Mr. Trump has mostly avoided. Their fear stems from the specter of a stagflationary shock, in which inflation intensifies as growth stalls.“The higher that tariffs end up being, the more stagflationary it will be,” said Eric Winograd, an economist at the investment firm AllianceBernstein.Tariffs have already had an impact on the economy in a number of ways, and the levies now threatened against the European Union risk causing even more painful disruptions, given that the bloc and the United States are each other’s largest trading partner.Ursula von der Leyen, the president of the European Commission, said in a statement that Mr. Trump’s latest tariffs “would disrupt essential trans-Atlantic supply chains, to the detriment of businesses, consumers and patients on both sides of the Atlantic.”So far, businesses have been able to mitigate some of the impact of Mr. Trump’s levies. To get ahead of the tariffs, they stockpiled products earlier this year, causing imports to surge before later crashing down. Americans have grown less confident about the economy as uncertainty surrounding Mr. Trump’s policies has frozen businesses in place.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    He Helped Big Companies Dodge Taxes. Now He’s Writing the Rules.

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    Ken Kies, a longtime tax lobbyist who worked for some of the world’s largest businesses, is now running the Treasury Department’s office that will administer Trump’s tax law.In January 2022, the Internal Revenue Service was cracking down on a tax dodge from the agency’s “dirty dozen” list of abusive shelters. To fight back, promoters of the scheme turned to the lobbyist Ken Kies.In a conference call with lawyers and financial advisers, Mr. Kies outlined plans to fight the I.R.S., including by capitalizing on his close relationship with a top agency official, according to a recording of the call obtained by The New York Times.Now Mr. Kies has become the Treasury Department’s top tax policy official. The former veteran lobbyist, who has worked for some of America’s biggest companies, was confirmed by the Senate last month to serve as Treasury’s assistant secretary for tax policy.It is not uncommon in President Trump’s Washington for lobbyists or other interested parties to get high-level positions at agencies where they once sought access on behalf of corporate clients. But Mr. Kies is not just any lobbyist. For decades, he has played an instrumental role in enabling some of the most lucrative and most important tax avoidance strategies used by multinational companies and the wealthiest Americans.When the Clinton administration sought to stem the tide of companies shifting trillions of dollars of profits into offshore havens, Mr. Kies led the effort on behalf of a coalition of businesses to kill the regulation. In the George W. Bush administration, Mr. Kies successfully pushed for legislation to make such offshore tax dodges even easier to execute. During the Obama administration, he fended off another attempted crackdown on those strategies.In 2017, as part of a sweeping package of tax cuts signed by Mr. Trump, Mr. Kies lobbied for a new tax break that provides a 20 percent deduction to certain businesses, which overwhelmingly benefits the richest Americans. And most recently, he advised the Trump Organization on a dispute with the I.R.S.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    It’s No Bluff: The Tariff Rate Is Soaring Under Trump

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    The president has earned a reputation for bluffing on tariffs. But he has steadily and dramatically raised U.S. tariffs, transforming global trade.President Trump’s on-again, off-again tariffs have prompted investors to bet that he will “always chicken out” and given businesses and foreign leaders hope that the leader of the world’s largest economy will ultimately back down from his threats if they prove too economically disruptive.Events of the past week have cast serious doubt on that bet. As Mr. Trump renews trade threats against more than two dozen trading partners, he is once again proving his fondness for tariffs, and embracing import taxes in a way that no other president has since the Great Depression.A self-described “tariff man,” Mr. Trump has continually extolled the virtues of heavily taxing imports as a way to raise revenue and cajole factories to relocate to the United States. While the president may ultimately give way on some of his most recent threats, he has still steadily and dramatically raised tariffs to levels not seen in a century.Over the past week, Mr. Trump has threatened 25 trading partners with punishing levies on Aug. 1 unless they sign trade deals that Mr. Trump finds acceptable. The list of countries he plans to raise tariffs on include some of America’s biggest sources of imports, including the European Union, Japan, Mexico, Brazil, South Korea and Thailand. Those countries had been in active talks with the United States about resolving Mr. Trump’s concerns in an effort to avoid tariffs.Several may still reach deals to avert some of the levies, including India, the European Union, Taiwan and Japan.But even if some deals are reached, American tariffs on trading partners are still likely to rise significantly. That was the case with the two trade agreement frameworks that the Trump administration has so far announced, with Britain and Vietnam, both of which leave double-digit tariffs in place.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More