Big business sits out the Supreme Court fight over Donald Trump’s tariffs
By John Fritze, CNN
(CNN) — It’s one of the most significant economic cases to reach the Supreme Court in years – the blockbuster battle over President Donald Trump’s sweeping global tariffs – but the nation’s largest companies are sitting on the sidelines.
The battle to stop Trump’s tariffs is being waged by a group of small businesses – including a family-owned toymaker in Illinois and a New York-based wine importer. They have advanced the case to the nation’s highest court even as their larger and better-known competitors have remained notably silent.
The lack of public input from major US companies on the docket of a Supreme Court appeal with potentially vast consequences for their bottom line and the economy as a whole is unusual and likely based at least in part on a fear of retribution from the White House, multiple people involved with the case and outside experts said.
The Supreme Court hears arguments Wednesday in the case, which will determine the fate of Trump’s “Liberation Day” tariffs as well as duties he has unilaterally imposed on imports from China, Mexico and Canada.
Trump has made the tariffs, a response to trade imbalances and fentanyl trafficking, the centerpiece of his economic agenda.
“I was shocked that those with much more power and money did not step up,” said Victor Owen Schwartz, the founder of V.O.S. Selections, the wine and spirits company that is one of the lead plaintiffs in the litigation.
“So when I was afforded the opportunity to speak for small American business, I took it.”
Trump has relied on a 1970s-era emergency law to reshape global trade and alliances with allies and adversaries. The law lets a president “regulate importation” during emergencies, but does not specifically mention tariffs. Relying on the International Emergency Economic Powers Act, Trump has rapidly turned some of those tariffs on and off and adjusted rates suddenly to squeeze or ease the pressure during negotiations.
The small businesses suing the administration say the moves are driving costs – and uncertainty – to intolerable levels.
While the president has described the case as an existential one for the country, he has avoided criticizing the companies involved in the litigation directly. Small businesses generally enjoy bipartisan political support and so having lesser-known companies lead the legal charge on tariffs may prove to be a strategic advantage.
Several plaintiffs interviewed by CNN were careful to frame the case as far away from national politics as possible.
“It’s an asphyxiating tax,” said Rick Woldenberg, the CEO of Learning Resources, which makes educational toys and other products and which is also a lead plaintiff.
“I’m not targeting Mr. Trump because I’m not a politician,” he said. “I’m a taxpayer who’s been hit with an unlawful tax.”
The Trump administration has argued the law’s words clearly encompass tariffs, even if the word “tariff” is not explicitly included. And it has warned that a loss would have “catastrophic consequences” for the economy.
“Plaintiffs would unwind trade arrangements worth trillions of dollars, as President Trump has leveraged the IEEPA tariffs into negotiated framework deals with major trading partners – including the European Union, the United Kingdom, Japan, South Korea, and now China – that address underlying causes of the declared emergencies,” US Solicitor General D. John Sauer, the administration’s top appellate lawyer, told the Supreme Court in written arguments last week.
Taking a side
Even when they are not named plaintiffs, major companies often wade into Supreme Court cases with friend-of-court briefs, offering their own take on the controversy pending before the justices.
Three years ago, more than 60 major American firms – including General Electric, Procter & Gamble and Intel – signed a brief urging the justices not to end affirmative action in college admissions, for instance.
Months later, the court ignored their advice. Today, some of the same companies that signed that brief are facing criticism in the second Trump administration for efforts to expand diversity within their workforces.
In 2019, Apple CEO Tim Cook personally signed an amicus brief at the high court supporting the continuation of the Deferred Action for Childhood Arrivals, or DACA, program created during the Obama administration for Dreamers. Home Depot signed a brief in 2021 in a case on damages suits. Walmart jumped into an appeal in 2017 dealing with the credit card industry.
But the big difference today is the administration’s willingness to pursue retribution against critics. Large companies, including many that have been affected by the tariffs, also avoided weighing in on the cases as they moved through lower federal courts.
“The federal government has immense leverage and immense power and can upend your business with a tweet or a tax investigation,” said Gregory Shaffer, a professor at Georgetown University Law Center. “I think there’s a sense that companies wanted to be more careful with this administration.”
Friend-of-the-court briefs rarely have sway over the outcome of a case at the Supreme Court, but they can sometimes influence justices in unexpected ways. Last week, an amicus brief from a Georgetown law professor led the court to pause a case involving Trump’s use of the National Guard in Illinois and request additional information from both the administration and state officials.
Fearing the ‘pain cave’
Cassie Abel, founder and CEO of a women’s outdoor apparel company called Wild Rye, agreed that fear of retaliation was probably part of the reason that larger companies haven’t engaged in the tariffs appeal.
Abel, who launched her company in Idaho nearly a decade ago, noted that Walmart and other retailers endured public blowback from Trump this year when they threatened tariff-related price increases.
“That was a clear signal that anyone who wants to speak out against this is going to be in the pain cave,” said Abel, who joined an amicus brief with other small businesses opposed to the tariffs.
But larger companies, Abel said, also may not be as immediately affected by tariffs as small ones. Some can switch supply chains or absorb the costs. And, Abel said, some of her largest competitors have pushed back on tariffs – just in quieter ways that don’t involve taking a public position in a high-profile case.
Some, meanwhile, have managed to secure exemptions to mitigate the impact of the tariffs.
Several major companies that have submitted briefs in high-profile cases at the Supreme Court in the past – including Apple, Levi Strauss, Walmart and Home Depot – did not respond to requests for comment.
The briefs that have made their way to the Supreme Court overwhelmingly oppose Trump’s emergency tariffs.
Former national security officials, a group representing the watchmaking industry, nearly three dozen former federal judges, a Virginia-based seller of audio equipment and many other small businesses told the justices they’re opposed to the import taxes. The Chamber of Commerce also filed a brief in favor of unwinding Trump’s tariffs.
It’s also not clear who is funding the litigation. Jeffrey Schwab, senior counsel at Liberty Justice Center, a group involved in the case, told CNN that it is funded by “individuals and groups that support our mission” but said it doesn’t disclose its donors without their permission.
“There are a lot of calculations going on,” said Gregory Husisian, a trade lawyer who represents large importers for the Foley & Lardner law firm. Large companies, he said, have to think about what legal argument they can raise “that’s not already before the court.”
Without that, he said, “what do you really gain by being the person who sticks your neck out?”
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