A growing chorus of small businesses has turned to the courts to challenge the administration’s tariffs, arguing that levies on a broad swath of imports are undermining the very firms President Trump says they are designed to help. Plaintiffs range from kit makers in Charlottesville that rely on imported electronic components to nearly four-decade-old wine and spirits importers, all saying higher duties are squeezing margins, complicating sourcing and pushing some to consider leaving the United States.

Levi, who assembles electronic kits in Charlottesville, said the tariffs reach “nearly every imported good — including many of the electronic components Levi uses to build his kits” and warned that prolonged high duties could force his company to relocate production offshore. His predicament illustrates a familiar economic dynamic: tariffs that shield upstream producers can increase costs for downstream manufacturers that incorporate imported intermediate goods, potentially eroding competitiveness and employment in those sectors.

Victor Owen Schwartz, who founded a wine and spirits import business nearly 40 years ago with his mother, framed his decision to sue as existential. “These tariffs threatened the very existence of small businesses like mine, making it difficult to survive, let alone grow,” he said in explaining why he took on the president in court. The legal challenges also drew an unusual evidentiary argument from economists supporting the plaintiffs, who wrote in a filing that “In fact, the United States does not manufacture less today than it did in the past,” countering a central justification for the tariffs.

The litigation raises core questions about trade policy mechanics and economic trade-offs. Tariffs are intended to make foreign goods more expensive, thereby protecting domestic producers; but when duties apply to inputs used by a wide range of manufacturers, they function as a tax on production. For small firms that lack scale to absorb higher input costs or to vertically integrate supply chains, that tax can mean shuttered plants, price increases for consumers or relocation to countries with lower trade barriers.

Market consequences are already evident in business planning. Firms dependent on specialized inputs face a choice: absorb costs and risk shrinking margins, raise prices and risk losing customers, or reconfigure supply chains—often by moving production or sourcing to countries outside the tariffs’ scope. That last response undercuts the political goal of reshoring manufacturing and reflects a longer-term dynamic in which global supply chains have become deeply integrated and hard to unwind quickly.

Policy options are limited and politically fraught. Easing tariffs would relieve pressure on input-dependent businesses but would provoke pushback from protected industries and political constituencies that benefited from the levies. Courts now will adjudicate whether the administration exceeded its authority or misapplied trade statutes, but the broader economic debate about protectionism versus integrated trade remains unresolved.

If the lawsuits succeed or the administration adjusts policy, some relief may come for small firms. If not, expect continued legal challenges and incremental shifts in production footprints as companies balance tariff costs against strategic priorities. Either way, the disputes underscore how trade policy intended to protect domestic production can have perverse effects when applied across highly interconnected supply chains.