Mystery donors fund small businesses in SCOTUS tariff battle

In the midst of the ugly legal battle brought by small businesses against President Doland Trump’s historic tariffs, a mystery has popped up.

And it’s a doozy.

The Liberty Justice Center, a nonprofit group with a libertarian-leaning agenda that doesn’t disclose its donors, is helping pay some of the legal costs for the small businesses, which argue that the highest tariffs in almost a century are horrifically devastating their bottom lines.

But those donors are an intriguing bunch, to say the least.

SCOTUS holds arguments on President Trump’s tariffs

The Supreme Court heard oral arguments Nov. 4 in the cases brought by small businesses across America which argue that the tariffs have harmed them by drastically increasing their costs. 

From bridal stores to coffee cafes to machine shops, the sweeping tariffs imposed under the Trump administration have put the survival of thousands of U.S. small businesses at risk.

At the heart of the dispute is the use of the International Emergency Economic Powers Act (IEEPA) to justify broad import duties that many small firms say are threatening their survival.

For many small-business owners across America, the tariff impacts are already tangible. According to the U.S. Chamber of Commerce, tariffs have “raise[d] prices for consumers and businesses and harm economic growth…an especially big problem for small businesses that don’t have as many resources to withstand them.”

Meanwhile, a detailed analysis by the American Action Forum estimates direct annual tariff costs to small businesses at roughly $85 billion, with indirect burdens adding billions more.

What the high court’s decision on tariffs could mean

In court filings, the small-business plaintiffs argue that tariffs are driving input costs higher, forcing price hikes, squeezing margins and damaging planning certainty.

The Supreme Court’s decision will determine whether the executive branch overstepped its authority when the tariffs were imposed without explicit congressional approval. 

Legal scholars argue that if IEEPA is read to allow those tariffs, that would amount to an unconstitutional delegation of legislative authority and weaken the checks on presidential trade power.

For small enterprises across retail, manufacturing and goods-importing sectors, the outcome may determine whether supply-chain shocks and tariff-driven cost hikes become manageable or turn into a widespread braking factor on growth.

Data from the Federal Reserve Bank of Boston show that for importing small- and medium-sized businesses, heightened tariff uncertainty correlates strongly with reduced expectations for investment and hiring.

So what’s up with the Liberty Justice Center?

Some of the most prominent groups and scholars associated with the conservative movement have sided against President Trump in the tariff lawsuit.

This highlights how import taxes have emerged as one of the clearest fault lines between the president’s MAGA base and the free-market groups that defined Republican politics before the current administration, the Washington Post reported.

Related: Another European car company gets knocked out by tariffs

The Liberty Justice Center, a nonprofit group with a libertarian-leaning agenda, describes itself as a nonpartisan, public-interest litigation firm that protects Americans' fundamental rights.

It has previously challenged public-sector unions and sued to prevent the ban on TikTok from taking effect.

Liberty Justice Center does not disclose the names of its donors, but a Washington Post analysis of tax filings found that since 2020, it has received money from Donors Trust, the Walton Family Foundation, and the Bradley Foundation, all of which have been prominent conservative donors. 

According to the Post, Donors Trust is a fund that receives money from wealthy donors whose identities are not disclosed and steers it toward conservative causes. 

The group has frequently backed organizations associated with Federalist Society co-Chairman Leonard Leo, who counseled President Trump on judicial picks during his first presidential term, but whom the president denounced in May, in part because of the tariff case.

Liberty Justice Center is also listed as a national partner of the State Policy Network, a network of conservative nonprofit organizations with links to Charles and David Koch that also receives funding from Donors Trust.

Losing tariff lawsuit would be huge blow to president’s economic agenda

President Trump has leveraged the levies as a tool of economic coercion in trade and defense-spending negotiations. 

He has also used them to punish countries against which he has grievances.

“If a President is not allowed to use Tariffs, we will be at a major disadvantage against all other Countries throughout the World,” he said in a social media post over the weekend. “If a President was not able to quickly and nimbly use the power of Tariffs, we would be defenseless, leading perhaps even to the ruination of our Nation.”

The White House claims the tariffs have brought over $90 billion into the U.S. Treasury this year.

Related: The costs of new tariffs are no joke