(The Register)—The Trump administration’s tariffs are famously raising the prices of high-ticket products with lots of chips, like iPhones and cars, but they’re also hurting small businesses like game makers. In this case, we’re not talking video games, but the old-fashioned kind you play at your kitchen table.
On Thursday night, 11 small businesses, including five game makers, filed a lawsuit [PDF] with the US Court of International Trade against defendants that include President Trump, US Customs and Border Protection, the Department of Homeland Security, the International Trade Commission, and agency heads. They are challenging the administration’s authority to impose tariffs under the Constitution and other US laws, saying that the so-called national emergencies Trump declared in his executive orders do not give him the power to impose new import taxes.
Plaintiff Stonemaier Games, which has worked with a manufacturing partner based in China for more than a decade, recently published a blog post about the cost of the tariffs, which amount to 145 percent for the biz.
“Like many tabletop publishers (import code 9504.90.6000*), we started print runs of products before the President took office, and now we face an unprecedented $14.50 tariff tax for every $10 we spent on manufacturing with our trusted long-term partner in China,” the tabletop game publisher said. “For Stonemaier Games alone (a US based company in which all 8 employees are US citizens), that amounts to upcoming tariff payments of nearly $1.5 million.”
Stonemaier Games founder and CEO Jamey Stegmaier told The Register that it’s common among game publishers to rely on a supply chain that starts with a partner in China. Freight is then shipped to distributors and fulfillment centers around the globe, before products finally reach retailers and customers.
“This may vary based on the publisher (many publishers use crowdfunding for pre-sales; some smaller publishers aren’t in distribution, etc), but that’s the general idea for most hobby game publishers,” said Stegmaier.
“In the short term, the tariffs are devastating for any business who has already invested in production in China.”
“There’s certainly a discussion to be had about the long-term impacts of tariffs (I prefer carrots over sticks, personally). But in the short term, the tariffs are devastating for any business who has already invested in production in China.
“If the tariffs were actually friendly to small businesses in any way, they would have included a grace period for all products already in production. But they weren’t, so many of the businesses the tariffs claim to benefit will be out of business within a few months.”
Another company involved in the lawsuit, Ohio-based Rookie Mage Games, had to pay $3,120.80 in tariffs in April levied by CBP for products imported from China, the lawsuit says.
Other game companies not involved in the litigation have similar concerns.
In a blog post about a week ago, Nathan McNair, co-owner of Austin, Texas-based Pandasaurus Games lamented the damage done by the administration’s tariff policy. The six-person company represents the sole source of income from McNair and his wife. And McNair foresees ruin.
“This is not making American workers better, it is hurting American workers and it is killing American small businesses.”
“Already several of my friends have lost their employment, and already companies have shut their doors as a direct result of these tariffs,” he wrote. “It will get worse. This is not making American workers better, it is hurting American workers and it is killing American small businesses.”
Underscoring that point, tabletop game publisher Greater Than Games earlier this month announced staff reductions as a consequence of the tariffs.
It’s not just game makers, either. Plaintiff Princess Awesome, for example, is a Maryland-based small business that sells clothing for adults and children. According to the complaint, the outfit, which describes itself as committed to ethical manufacturing, “was invoiced by Customs for $1,041.40 in tariffs pursuant to the actions challenged herein for girls’ dresses imported from China” in March.
The Pacific Legal Foundation (PLF), a nonprofit legal organization representing the businesses, argues that the International Emergency Economic Powers Act (IEEPA), the cited legal basis for the levied fees, does not actually include the ability to impose tariffs.
The legal aid group further asserts that the national emergency declared by the President on the basis of “foreign trade and economic practices” doesn’t amount to an “unusual and extraordinary threat” – a condition required to invoke the IEEPA. And even if the court were to find the trade situation sufficiently emergent to justify the invocation of the IEEPA, the power to tax lies with Congress and not with the President, the PLF says.
“For nearly 50 years since its enactment, no president until now has relied on IEEPA to impose tariffs,” the PLF said in a statement. “The Constitution gives Congress – not the president – the power to impose tariffs because policies affecting an entire nation should come from the body most representative of the entire nation. And Congress cannot delegate that core legislative power to the president.
“The bottom line is that the president is exercising a level of control over tariff policy that he should not have and that Congress cannot constitutionally give him. These tariffs are unconstitutional and cannot stand.”
The other plaintiffs sell art and art supplies, toys, and imported foodstuffs, as well as a shop that freezes metal parts such as brake rotors so they last longer. They are all seeking a refund for fees paid under CBP’s Harmonized Tariff Schedule of the United States and an injunction against future tariffs under the IEEPA.
Their argument echoes similar complaints from California Attorney General Rob Bonta and the Liberty Justice Center earlier this month, in response to a series of Executive Orders that began in January.
“There are tens of thousands of American businesses like these who are harmed by these tariffs,” the PLF said. “And the rest of us won’t be spared either as tariffs will result in increased prices across the board on the products all Americans buy.”