NEW YORK: A US trade court has revived a challenge to President Donald Trump’s move to end a tariff exemption for low-dollar imports, resuming a legal fight with financial stakes for online retailers and small businesses as well as Americans who directly buy goods overseas.
Litigation over what’s known as the de minimis exemption was on hold while the US Supreme Court considered a broader dispute over Trump’s global tariffs.
The justices in February struck down his use of an emergency powers law to impose duties, but didn’t address his authority to halt the exemption for low-value packages – a related but separate question.
Trump signed executive orders over the past year suspending a longstanding tariff carve-out for imports with a retail value of US$800 or less.
US-based auto parts distributor Detroit Axle, which brought the lawsuit, contends the president unlawfully overrode Congress, which set that floor for duties.
The New York-based US Court of International Trade lifted the pause on the exemption case on March 5. A three-judge panel set a schedule for written briefs that wraps up in April.
If the court rejects arguments by the US Justice Department, which is defending the administration, Trump’s tariff policies once again could be on a path to reach the Supreme Court.
White House spokesperson Kush Desai said in a statement that “the president has lawfully exercised the powers granted to him by Congress to suspend de minimis exemptions, and the administration will vigorously defend this policy shift to safeguard our national and economic security”.
A trade court judge has ordered the administration to take steps towards refunding tariffs the Supreme Court declared unlawful, a process that would appear to cover at least some of the duties paid on low-value imports.
But the litigation over the future of the exemption involves other tariffs as well.
Customs and Border Protection announced in December that it had collected more than US$1bil in tariffs on imports that would have fallen under the exception.
The agency didn’t break down that number by tariff type. A spokesperson didn’t immediately respond to a request for comment on Monday.
Detroit Axle said it paid tens of millions of dollars to bring in goods that should have been exempt, including “auto-part-specific” duties that weren’t before the justices.
After the Supreme Court ruled against Trump’s use of the International Emergency Economic Powers Act, he imposed a fresh round of global tariffs under a different authority.
A coalition of Democratic state officials and several small businesses have sued.
“The massively increased costs resulting from the tariffs have caused significant uncertainty and devastated Detroit Axle’s profitability,” the company’s lawyers wrote in their complaint. — Bloomberg
