There is a big sigh of relief from Massachusetts businesses to the Supreme Court’s decision that struck down President Trump’s sweeping tariffs.
The court issued a 6-3 decision today against the tariffs imposed under an emergency powers law that Trump had signed last year, levying tariffs on nearly every other country. The financial impact of those tariffs hit many businesses here in the Commonwealth that have had to pay higher prices for imported goods.
After the ruling, Trump said he will impose a global 10% tariff under a law that allows him to do so for up to 150 days while he looks for other laws to keep the existing tariffs in place.
But Brooke Thomson, president and CEO of Associated Industries of Massachusetts, said the Supreme Court’s ruling sends a clear message that the ability to enforce tariffs or taxes stands with Congress, not with the president.
“The reason this is very beneficial to our members is because 96% of the burden that has been put in place as a result of this policy has been borne by Americans, and our businesses are seeing it every single day,” she said.
Thomson added it’s the right decision based on the Emergency Economy Powers Act and the Constitution. But more importantly, she said the greater benefit, if tariffs are curbed as a result, is it will drive costs down to Massachusetts businesses, particularly manufacturers.
“Massachusetts exports $77 billion worth of goods globally every year, and that amounts to essentially one in five jobs here in the Commonwealth.” Thomson said. “So that additional burden of cost is really being felt by Americans, by folks in the commonwealth, by our businesses.”
While some manufacturers have been able to pivot to either absorb or offset some of the cost, Thomson said the majority indicate that the tariffs have strained, in real time, their ability to grow.
“We had two or three examples, particularly from the central and western part of the state, where, because of the tariffs, they literally lost contracts while some of their products were in route because of the dramatic increase in cost,” she said.
AIM represents 3,400 members and more than 150 different industries across the state.
Many businesses have seen dramatic cost increases throughout the market, such as raw materials and clothing. Particularly, costs for housing, in areas such as lumber, metal and steel, have gone up significantly.
Thomson cited the example of a paper manufacturer in the Berkshires that receives about $15 million worth of their paper from Canadian suppliers annually. Thomson said the company saw its raw material costs go up by $4 million a year and had to pass that increase along.
She said the trickle-down effect this past year has been severe.
“What we also see is, downstream, people are saying, ‘Well, I’m going to buy less. I’m going to build fewer homes because I can’t afford construction companies,’ and builders are saying, ‘I’m not going to absorb those costs.’”
The intended goal of imposing the tariffs was to create more onshore manufacturing and to bring more of the suppliers from other countries back to the United States. But Thomson said it took decades for our country to offshore the resources, and in a global economy, it could take decades to reverse.
“It was a really blunt and sort of widespread instrument that in reality was going to cause more pain than good for a period of time. And I think there were a lot of economists saying something similar,” Thomson said.
