Donald Trump’s deadline is approaching. The companies challenging the legality of their customs duties presented their arguments in a brief filed with the Supreme Court on Monday, October 20. The hearing will begin on November 5. These companies consider that the American president has exceeded his rights, while the power to impose taxes belongs in principle to Congress, that is, Parliament. Two courts have already ruled in this regard.
“The framers of the Constitution understood that taxes are a powerful power, capable of destroying taxpayers and at the same time filling the coffers of the sovereign. The Constitution vests this extraordinary power exclusively in the branch of government that is considered most responsive to citizens: Congress. The Court should not lightly assume that Congress abdicated its fundamental taxing power to allow the President to tax Americans,” they add.
“The president, with the stroke of a pen, has multiplied the effective rate of customs duties tenfold (…). Since then, he has increased and reduced, suspended and resumed, threatened or lifted customs duties at will, for a multitude of reasons. By the Government’s own admission, these measures represent a tax increase of more than 3 trillion dollars for Americans over the next decade,” screams one of the plaintiffs, the company Learning Resources, a manufacturer. of children’s toys. This company estimates that paying customs duties will cost it $100 million this year, 44 times more than last year.
Possible refund of taxes paid
To apply customs duties, Donald Trump relied on a law intended for emergency situations (IEEPA), and more specifically on a provision that authorizes him to “regulate the importation” of goods in case of emergency. Several US importers dispute this argument. The latter were successful at first instance and then on appeal. On August 29, a federal appeals court ruled that Donald Trump had committed an abuse of power. The Trump administration decided to take the dispute to the Supreme Court, the court of last resort in the United States. Meanwhile, the application of customs duties has not been suspended and American companies that import foreign products continue to pay the taxes owed.
If Donald Trump loses his appeal, most customs duties would likely be suspended and the US Treasury could even be forced to refund some taxes already paid. By the end of October, this could represent $108 billion, according to PwC. This would “literally destroy the United States,” the US president warned in late August. The latter dramatizes the issue and criticizes the small businesses that attacked him – including a toy manufacturer and a New York-based family-owned wine importing company – as “radical left-wing lunatics.”
Source: BFM TV
