BURLINGTON, Vt. (WCAX) – Vermont businesses said Friday’s Supreme Court ruling striking down most of President Trump’s tariffs will hopefully bring clarity and predictability to their operations.
The Supreme Court ruled 6-3 on Friday, siding with businesses that sued, saying Trump’s reciprocal tariffs were unconstitutional. The ruling does not affect sector-specific tariffs on products such as copper, steel and aluminum.
Small businesses that brought the lawsuit are now demanding refunds. It is unclear if that is possible or how it would happen. The court’s ruling did not address that.
Burlington-based Terry Precision Cycling was one of the small businesses that sued, arguing the tariffs were illegal. In a statement, company CEO Nik Holm said in part: “Today’s ruling is welcome news for American small businesses like mine. The court system has been unanimous: these draconian, across-the-board tariff taxes have no legal or constitutional basis.”
Williston-based Rigorous Technology, an industrial engineering company, was not directly hit by the tariffs, but said its customers were.
“A lot of our customers are manufacturers here in the United States, but all of their equipment is made overseas,” said Diane Abruzzini of Rigorous Technology.
Rigorous Technology recently hosted a roundtable where Vermont Sen. Peter Welch heard from other Vermont companies that said they found it difficult to keep up with constantly changing import fees.
“It’s a hard way to navigate when things might be different in a month or the price of something is completely unknown by the time it arrives in your facility,” Abruzzini said.
Vermont Commerce and Community Development Secretary Lindsay Kurrle said the ruling highlights the impact the tariffs had on some businesses.
“When you see a small manufacturer out of Vermont willing to engage in litigation– which we know can be very costly– it really highlights how this adversely impacted some businesses,” Kurrle said.
Kurrle said she hopes the ruling will help improve trade relations with Canada, Vermont’s largest trading partner and a tariff target.
“We hope that now this can allow our relationship, our trade relationship to both Canada and beyond to flourish and grow again,” Kurrle said.
Kurrle said it is not clear whether any Vermont businesses expanded because of the tariffs.
Rigorous Technology said it wants to bring manufacturing back to U.S. soil, but said it has to be a team effort.
“I think strong policy is necessary to reshore manufacturing, but doing so with Congress, and in a way that allows business owners to plan, will be a benefit to everyone,” Abruzzini said.
WHAT NOW?
The president announced the tariffs last April on what he called “liberation day,” arguing they were economically necessary and a matter of national security.
So why did the high court rule against the president?
Trump cited two laws that he said allowed him to impose tariffs due to national security issues: the International Emergency Economic Powers Act and the Trade Expansion Act of 1962.
But Vermont Law School professor Jared Carter told us the high court said the president overstepped his authority and those laws said nothing about tariffs.
“In the end, it’s going to be the U.S. Supreme Court that calls balls and strikes. The president, whether it’s Donald Trump or any other president, can say, ‘I can do this, this is OK.’ But in the end, it’s going to be the U.S. Supreme Court that decides,” Carter said.
Carter said the ruling also affirms that Congress has the power over tariffs and taxation.
Now the question is– what’s next? And what should happen to the billions of dollars collected through those tariffs. Carter said that’s what everyone wants to know.
“The big question I have is what happens to that hundreds of billions of dollars now that was illegally now obtained through these tariffs? It seems highly likely that there’s going to need to be some sort of mechanism for refunds to the companies that were subject to these tariffs illegally,” Carter said. “So, I think the logistics of that, the economic impacts of that, are yet to be determined. But when the court says, ‘You didn’t have the authority to do this,’ it would seem to me that the next step is going to have to be, how do we get that money back into the pockets of the businesses that were impacted? We’re never going to be able to see, I think, a complete remedy of this because in the end, it was the American consumers, including Vermont consumers, who were impacted by price increases as a result of these tariffs. So, the consumers aren’t ever going to see that money back in their pocket. But I think the next question will be, what do we do with the money that was raised if, in fact, as we know now, the tariffs were unlawful?”
The high court’s ruling did not say how businesses might be refunded for tariffs collected.
