EarthQuaker Devices, a musical instrument manufacturer in Akron, Ohio, uses more than 900 components from over 15 countries to make products that change the sound of guitars, with names like “Tentacle,” “Rainbow Machine” and “Gary.”
The tariffs imposed by President Trump on almost all trading partners have dramatically increased the cost of these components. But EarthQuaker hopes the tariff case the Supreme Court plans to hear Wednesday will render those taxes moot.
The company spent hours searching for U.S. suppliers that would allow it to avoid the tariffs. Citing emergency legislation, the president has imposed tariffs on more than 100 countries this year to reduce the trade deficit and shift more manufacturing to the United States. However, EarthQuaker found that parts available domestically were 20 to 30 times more expensive than those available abroad. There is no sign that the tariffs will encourage suppliers to build U.S. factories to make their goods instead, the company said.
“We have spent many hours of wasted time and energy looking for solutions that don’t exist,” said Julie Robbins, executive director of EarthQuaker. The company paid the U.S. government more than $40,000 in tariffs this year and sales fell 10 percent, she said.
EarthQuaker is one of hundreds of small businesses that say they are suffering because of Mr. Trump's import tariffs. Many of them have plunged into a looming legal battle to make this case. On Wednesday, the Supreme Court will begin considering the president's broad use of emergency powers to impose tariffs. Legal experts say the case is a blunder, but it has significant implications for U.S. companies whose fate is determined by policies set in Washington.
Mr. Trump used emergency authority, the so-called International Emergency Economic Powers Act, to quickly raise and lower tariffs on dozens of trading partners. In briefs presented to the court last week, EarthQuaker and other small companies argued that these decisions have hurt their profits and forced some to cut prices, lay off workers or otherwise change their plans. The argument contradicted Mr. Trump's repeated claims that the tariffs had not harmed U.S. companies, workers or consumers.
The president has made it clear that he understands how important this case is to his economic agenda. In a social media post on Sunday, Mr. Trump called the case “one of the most important in the history of the country.”
“If a president is not allowed to use tariffs, we will be at a huge disadvantage compared to every other country in the world,” he added.
Industry groups that have filed briefs with the court on behalf of companies disagree. Sara Yood, the executive director of the Jewelers Vigilance Committee, said her industry was grappling with both “deep uncertainty” and rising prices, which hit particularly hard in an industry where prices were already high.
Ms. Yood gave the example of diamonds that are mined in various countries but are often cut and polished in India. Mr. Trump used emergency powers to unexpectedly impose a 50 percent tariff on Indian exports in August, which had a “tremendous impact” on that trade, she said.
“Some people have just stopped buying at the moment,” Ms Yood said. Others had to pay the tariffs or negotiate deals with suppliers while continuing to wait for a trade deal between the United States and India that failed to materialize, she said.
Aabesh De, the founder of Flora, a Tennessee-based company that makes sensors to alert plant owners that their plants need attention, said the tariffs have forced his company to defer inventory, research and development, orders and more.
In a press conference last week organized by a coalition of small businesses called We Pay the Tariffs, which includes EarthQuaker, Mr. De described the tariffs as a “man-made existential crisis” under Mr. Trump.
Small businesses have played a prominent role in the Supreme Court challenge. The lead plaintiffs in the case include VOS Selections, a wine importer, and Learning Resources, an educational toy maker in China. By contrast, many large companies have remained conspicuously quiet about the impact of Mr. Trump's tariffs.
Peter E. Harrell, a visiting fellow at Georgetown's Institute of International Economic Law and a former Biden White House official, said tariffs are “undoubtedly painful for large companies.” But he said: “I think large companies feel more threatened by retaliation than small companies simply because they are companies that Trump has heard about.”
Mr. Harrell, who served as one of the congressmen's advisers at a briefing on the case, said large companies were also better able to adapt to tariffs by adjusting their prices and supply chains or lobbying for exemptions. Small companies, on the other hand, had little influence and hardly any alternatives to paying the tariffs.
“Not only are small businesses less afraid of retaliation, but they also feel like we have no choice,” Harrell said.
The U.S. Chamber of Commerce and the Consumer Technology Association, both of which represent large multinational companies, filed a brief with the Supreme Court last week arguing that the emergency law does not confer the sweeping power that the president has claimed.
In a statement to The New York Times, the board said the brief was “consistent with our position that the challenged tariffs were imposed beyond statutory authority and are causing irreparable harm to businesses of all sizes.” It declined further comment.