Toymaker Takes Trump Tariff Fight to the Supreme Court

Just days after Donald Trump announced his sweeping “Liberation Day” tariffs in April, Rick Woldenberg began searching for a law firm willing to help him take on the U.S. president.

Woldenberg, CEO of Learning Resources—an educational toy company founded by his mother in suburban Chicago—said, “I can’t let leaders destroy what generations have built.” On Wednesday, Woldenberg and attorneys from Akin Gump will seek a landmark victory before the U.S. Supreme Court. The nine justices will hear arguments in Learning Resources v. Trump, along with two related cases challenging the legality of the Republican leader’s tariffs.

One of those cases was filed by Oregon and other Democrat-led states; another by the libertarian nonprofit Liberty Justice Center on behalf of five small businesses, including wine distributor V.O.S. Selections and educational toy maker MicroKits.

While the Supreme Court usually takes months to issue a ruling after arguments, the Trump administration has urged it to act quickly.

Big Companies on the Sidelines

Major U.S. corporations have largely stayed out of the tariff litigation. They have neither filed lawsuits nor submitted amicus (“friend of the court”) briefs—documents often used by outside parties to highlight the importance of a case.

By contrast, nearly a dozen small businesses have joined similar lawsuits brought by nonprofits in lower courts, challenging the same tariffs. Additionally, more than 700 individuals have signed an amicus brief filed by advocacy group We Pay the Tariffs, opposing Trump’s actions.

John Horn, a professor at Washington University’s Olin Business School in St. Louis, said Trump’s tariffs have disproportionately hurt small and medium-sized businesses, which lack the flexibility larger firms enjoy. “Big companies had more cash reserves, allowing them to stock up on inventory before the tariffs hit,” Horn explained. “They can also manage pricing and supply chains more effectively. And rather than litigate, they tend to rely on lobbying for exemptions.”

“Large businesses have the ability to negotiate or lobby for relief,” he added. “Small ones don’t.”

Woldenberg said his legal bills have run into the millions, but he views the lawsuit as a necessary expense. “This kind of legal advocacy isn’t for everyone,” he said. “There are millions of businesses in the same position as mine, but as far as I know, I’m the only person in a country of 300 million who decided to sue using his own resources.”

“You Can’t Plan Ahead”

The Supreme Court case centers on Trump’s use of the International Emergency Economic Powers Act (IEEPA) of 1977 to impose tariffs that have generated roughly $100 billion for the U.S. Treasury. The law was intended for use during national emergencies, but Trump declared America’s trade deficit—persistent since 1975—a national emergency.

As part of his April 2 “Liberation Day” announcement, Trump imposed a baseline 10% tariff on nearly all countries, with additional levies ranging from 11% to 50% on dozens more.

The lawsuits argue that Congress never intended IEEPA to grant presidents authority to impose tariffs. Three lower courts have already ruled against Trump, finding that his tariffs exceeded his legal powers under the act.

Companies like Learning Resources—whose educational toys are mostly manufactured in Asia—have borne the brunt of these tariffs.

In his January inaugural address, Trump claimed the duties would turn the U.S. back into a “manufacturing nation.” But importers argue they want to produce domestically—if only the necessary parts and services were available or affordable.

Scaling Back

In response to the tariffs, Woldenberg said Learning Resources scaled back expansion plans to preserve cash. He scrapped a construction project that would have added 600,000 square feet (55,700 square meters) of warehouse and office space for Learning Resources and its sister company Hand2Mind, which together employ about 500 people.

He also dropped plans to hire 30 additional staff in 2025 and reduced spending on marketing and training. “When Trump’s tariffs hit,” Woldenberg said, “I knew we’d shrink and earn less. And both of those things have come true.”

His frustration is shared by David Levy, founder of MicroKits, a small toy company based in Charlottesville, Virginia, and a plaintiff in a related Supreme Court case.

MicroKits sells electronic instruments—including the Synth-A-Set synthesizer that teaches kids about conductivity—using imported parts, mostly from China, which Levy assembles with help from a part-time employee.

When tariffs on Chinese imports jumped above 100% this spring, Levy temporarily halted imports and slowed production to keep his employee working. He cut her weekly hours from 25 to 15 and assembled thousands fewer toys than expected.

Founded in 2020 after Levy left jobs at Hasbro and Mattel, MicroKits had been growing 30% annually and was on track to hit $1 million in revenue by 2025. Instead, this year’s revenue will fall to about $400,000 due to the tariffs.

Levy said the U.S. doesn’t produce the consumer-grade electrical clips his products require. Domestic clips, designed for aerospace and medical use, cost at least ten times more than Asian ones.

“I expected to deal with tariffs and taxes,” Levy said, “but not this constant uncertainty—tariff rates jumping above 100% and then dropping again without notice. In that world, you’re just guessing what’s coming next. You can’t plan ahead.”

“An Overwhelming Response”

Levy said he discovered a webpage where the Liberty Justice Center was inviting businesses to join its lawsuit. The public-interest law firm is representing him and four others free of charge.

“When we put out a call for plaintiffs, we got an overwhelming response from small businesses nationwide,” said attorney Jeffrey Schwab of the Liberty Justice Center. “We spoke with dozens of owners and chose five whose experiences best illustrate the damage tariffs have caused—and who were willing to shoulder the public attention that comes with the case.”

Among them is Victor Schwartz, founder and president of Manhattan-based wine distributor V.O.S. Selections, who said he felt a “moral obligation” to challenge Trump’s tariffs, which have cost his company about $200,000.

“The tariffs hit wine importers especially hard,” Schwartz said, “at a time when we’re already grappling with inflation, a weak dollar, and declining alcohol consumption in the U.S.”

“I was surprised,” he added, “that those with more power and money didn’t step up to help.”