Georgia businesses whipsawed by tariff court rulings

Many local business owners say they remain wary of ongoing uncertainty in the rapidly evolving landscape of international trade. As the Trump administration appeals the ruling, it also could seek other paths to roll out import taxes.

A three-judge panel of the U.S. Court of International Trade ruled Wednesday that Trump overstepped his authority when he invoked the 1977 International Emergency Economic Powers Act to declare a national emergency and justify the sweeping tariffs, The Associated Press reported.

The trade court’s decision blocked the so-called reciprocal tariffs Trump imposed in April on almost all U.S. trading partners as well as tariffs on goods from China, Mexico and Canada announced earlier this year. The ruling left in place other Trump tariffs on steel, aluminum and autos that were invoked under a different law.

A day later, the U.S. Court of Appeals for the Federal Circuit said most of Trump’s reciprocal tariffs could stay in place as the administration appeals the case.

White House spokesperson Kush Desai said the administration remains “committed to using every lever of executive power to address this crisis and restore American Greatness,” AP reported.

Meanwhile, Dan Ellsworth, who runs a Roswell-based aerospace distribution company, told The Atlanta Journal-Constitution he wanted to use the trade court’s ruling to fly in from overseas $1 million worth of electrical components. Ellsworth’s company, World Micro, imports rivets, circuits, airplane parts and other components, many of which are not manufactured in the U.S. With the appeals court ruling, the tariffs are back.

The customer who ordered the components did not approve payment of the extra tariffs, so the order had been on hold while the taxes were in effect, Ellsworth said.

Credit: Jason Getz / Jason.Getz@ajc.com

Credit: Jason Getz / Jason.Getz@ajc.com

Reached after news of the appeals court decision, Ellsworth said, “It’s unfortunate they sided with the administration,” but added, “Now we just need to let the appeal process work through,” and expressed hope for a permanent fix to the volatility of taxation and tariffs.

Brookhaven resident Shena Simmons’ company, Stewart Simmons, sells collegiate game day clothing. About 30%-40% of her garments are made in China, with the rest produced in India.

She said “the uncertainty that we’ve been battling for months is still there.”

Credit: HYOSUB SHIN / AJC

Credit: HYOSUB SHIN / AJC

She said she was relieved when the Trump administration announced a deal with China in early May to put 145% tariffs on hold for a 90 day truce in the trade war and said the Wednesday ruling is “encouraging.”

But, “we don’t know if we should push to import as much as possible or stall and wait to see what happens,” Simmons said. “We’re having trouble finding space on vessels due to the surge in imports coming in before the 90 day pause is up.”

Simmons, who uses an Atlanta warehouse near Six Flags Over Georgia, said there’s still that uncertainty that lingers for businesses, with questions left unanswered.

“Where do I go? What do I do?” Simmons said. “What do you do next? And that’s still impossible for businesses to plan around.”

Credit: HYOSUB SHIN / AJC

Credit: HYOSUB SHIN / AJC

Unexpected Trump moves

For Ellsworth, who works with the aerospace industry and counts Boeing, Lockheed Martin and Northrop Grumman among his clients, “there may be (20,000) to 30,000 different components that make up a plane,” and even if the plane is built in the United States, many of the parts and components are not.

“They come from Canada. They come from Europe. They come from France, they come from China. They come from Vietnam — every place. Knobs of rubber, switches, seat belts, rivets and all that stuff come from all over the world,” he said. “Even though the plane’s made here in the U.S., the content is not. So all that content is being taxed.”

Ellsworth voted for Trump, who made tariffs the linchpin of his economic platform when he ran for his second term, but what has happened is not what Ellsworth expected.

Credit: Jason Getz / Jason.Getz@ajc.com

Credit: Jason Getz / Jason.Getz@ajc.com

“I’m a Trump supporter,” he said. “He did say he was going to do reciprocal tariffs. … I interpreted that as we will charge the country the same rate that they’re charging us.”

That’s not what happened. Instead, the Trump administration initially announced varying tariffs based on a calculation to balance trade deficits, including 145% tariffs on most goods from China, 46% on goods from Vietnam and 32% on goods from Taiwan. Nearly every country had at least 10% tariffs imposed on their goods. Trump later paused many of them, enacting 10% tariffs on most countries, but kept higher levies against China before reaching the early May ceasefire with the world’s second largest economy. Those were among the tariffs halted by the trade court ruling this week that have now been reinstated, at least temporarily.

Ellsworth said he hopes his business can find a strategic advantage in the trade war — because his company specializes in tackling difficult supply chain issues and can use a foreign trade zone to delay the payment of tariffs.

He expects with some parts, he will see a decline in volume. But he also hopes clients will contact World Micro when they urgently need a part that is now more difficult to get because of the tariffs.

But he thinks the way the tariffs have been rolled out has hurt the nation’s reputation on the global stage.

“By doing the tariffs the way they’ve been done, there’s a brand that’s been damaged, and that brand is called the United States of America,” Ellsworth said. For other countries in the world, “I think it forces them to band together.”