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From this moment the President donald trump After tariffs were imposed on almost every country, Nick Holm feared that the company he leads would not be able to survive.
Terry Precision Cycling celebrates 40 years with a product line specifically for women, overcoming a tough beginner market, low profit margins and a pandemic-era boom and bust. But company president Holm was unsure how his operation would pay the tariffs first announced in April and stay in business.
“We felt like our backs were against the wall,” he said, explaining why he joined the lawsuit challenging the tariffs. Supreme Court Will hear next week.
Terry Precision Cycling’s offices are hidden behind a burlington, VermontCoffee shop on a leafy street that changes color in the fall. Local admiration shares wall space with bike saddles and a color wheel’s worth of fabric samples. Orders are shipped from a warehouse a few miles away.
It seems the unlikely epicenter of the uproar over Trump’s tariffs on the trading floors of global market exchanges and in the boardrooms of international corporations.
But Terry Precision Cycling is one of a handful of small businesses challenging several of Trump’s tariffs before the Supreme Court on Wednesday in a case that faces limits on presidential power and has extraordinary implications for the global economy.
Small businesses suffered huge losses
The company is small, but it works with suppliers from all over the world. It sells cycling shorts made in the US using materials imported from France, Guatemala and Italy. Its distinctive, colorful printed bike jersey is made from high-tech materials that can’t be found outside China,
Tariffs mean the company has to pay more for all those imports, and without the cash reserves of a large company, it has few options to make up the shortfall except raising prices to customers. The astonishing speed of change in tariffs, especially on goods coming from China, has made determining prices a dice-rolling affair. “If we don’t know the rules of the game, how should we play?” Holm asked.
When tariffs in China reached 145%, the company had to add $50 to a pair of shorts in the pipeline, bringing the price to $199. “Tell us the cost and we can tell the price, and then we can go back and see who can actually afford it,” Holm said.
Other companies he joined in the lawsuit are also small businesses, including a plumbing supply company in Utah, a wine importer from New York and a fishing tackle company in Pennsylvania.
Holm started working for the company more than a decade ago and took up cycling alongside her job. He often rides his bike to work and rides bikes outside his office with the company’s designers and salespeople. A slim man with deep-set eyes and side-parted hair, Holm was named president nearly two years ago as the company started by female cycling pioneer Georgeanna Terry grappled with a downturn in the outdoor market following the coronavirus pandemic. His casual demeanor comes alive when he talks about the design of their padded shorts or the level of SPF protection in their jerseys.
“It’s all about staying fit and functioning and feeling safe and comfortable,” he said. “That’s our foundation, to bring guys, to bring women, to ride. Get more butts on bikes and get out there.”
The businesses challenging Trump’s tariffs are represented by the Liberty Justice Center, a libertarian-leaning legal group typically more associated with conservative causes. But he says Trump is wrong on the sweeping tariffs, which are projected to collect a total of $3 trillion from businesses over the next decade, according to the Congressional Budget Office.
They argue that the President is using an emergency powers law that does not even mention tariffs to claim nearly unlimited powers to impose import duties and make changes at will, something no other President has done on such a large scale.
Jeffrey Schwab, an attorney at the Liberty Justice Center, said, “This is practically what the American Revolution was fought for, the principle that taxation is not lawful unless it is adopted by the representatives of the people.”
Trump described this case as one of the most important cases in the country.
The Trump administration said the law allows the president to regulate imports, and that includes tariffs. The president has been vocal about the matter, suggesting at one point that he might go to the debate himself – something that no other sitting president has done. He said, “This is one of the most important cases in the history of our country because if we don’t win that case, we will be in a debilitating, troubled financial crisis for many years to come.”
The law Trump used for many of his tariffs, the International Emergency Economic Powers Act, has been invoked dozens of times over the decades, often to impose sanctions on other countries.
But no president had used it for tariffs until February, when Trump imposed tariffs on China, Mexico and Canada. He said the country was not doing enough to stop illegal immigration and drug trafficking.
In April, he unveiled “reciprocating” tariffs on almost all US trading partners, with a baseline of 10% and higher increases for specific countries, although many of them have since been halted. Tariffs on China once reached 145%, but have since been reduced to a total of 20% under Trump’s latest agreement with China.
Several lawsuits have been filed over emergency-power tariffs. The Supreme Court will also hear two other cases on Wednesday, one from a group of Democratic-leaning states and the other from an Illinois educational toy company.
The plaintiffs won two rounds in lower courts, although the government convinced four appellate judges that the law allows the president broad authority over tariffs.
How the Supreme Court will decide is an open question
The High Court will now be asked to rule on the scope of the President’s authority. The judges, three of whom were appointed by Trump, have so far been reluctant to check the extraordinary flexibility of his executive power.
But they have been skeptical of presidential claims to the power before, when Joe Biden tried to forgive $400 billion in student debt under a separate law dealing with national emergencies. The court found that the law does not clearly give Biden the power to implement such a costly program.
In contrast, Trump’s tariffs are expected to total trillions. An analysis by the Yale Budget Lab found that people’s bills are also expected to increase by about $2,000 per household this year.
Revenue from tariffs totaled $195 billion as of September, more than double the amount from last year — although the government may have to give that money back if a judge strikes down the tariffs.
Trump acknowledged that Americans might feel some short-term pain from the tariffs, but said they would bring more favorable trade deals and help American manufacturing. His administration says the tariffs are separate from the Biden student-loan matter because they are about foreign affairs, an area where it says courts should not second-guess the president.
However, for the people at Terry Precision Cycling, those big-picture political questions were a far cry from their decision to join the lawsuit. Holm thought more about the company’s approximately 20 employees, its heritage and the women who buy its products for the love of cycling.
“If it becomes so unbearable for them to do it, then fewer people will be able to access that joy, that freedom of being on a bike,” he said. “It was about surviving this uncertainty.”