Orange Juice Importers Ask CIT for Emergency Relief From Threatened Brazil Tariff
Orange juice importers Johanna Foods and Johanna Beverage Company on July 22 asked the Court of International Trade to either temporarily, preliminarily or permanently enjoin the federal government from "imposing and enforcing" President Donald Trump's threatened 50% tariff on Brazil. Filing a combined application for a temporary restraining order and motions for a preliminary or permanent injunction, Johanna Foods and Johanna Beverage said the tariff isn't a proper exercise of either Section 301 or the International Emergency Economic Powers Act (Johanna Foods v. Executive Office of the President of the United States of America, CIT # 25-00155).
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On July 9, Trump issued a letter to the Brazilian president threatening the 50% tariff on all goods from Brazil due to the Brazilian government's treatment of its former President Jair Bolsonaro, Brazil's attacks on free elections and the free speech rights of Americans, and the "longstanding and very unfair trade relationship." The orange juice importers took to the trade court last week to challenge the move and prevent the tariff from ever taking effect (see 2507180062).
Now filing for emergency relief, Johanna Food and Johanna Beverage argued that they are likely to succeed on the merits of their case, since Trump's tariff action is plainly illegal. The importers said at the outset that tariffs can't be imposed by letter. Trump's letter to the Brazilian president isn't a "legally binding Presidential document; it is correspondence." The letter doesn't cite any legal authority or "comply with style set forth in the most recent edition of the U.S. Government Printing Office Style Manual, nor does it conclude with the required recitation," the brief said.
Johanna Food and Johanna Beverage then argued that the tariff isn't a valid exercise of Section 301 or IEEPA. Section 301 requires "notice and investigation" and a finding that a foreign country has "committed unfair trade practices or violated trade agreements with the United States." The Brazil tariff "precedes any such investigation or conclusion that Brazil has committed unfair trade practices or violated trade agreements," and the letter itself seems to be the only notice of an investigation of Brazil, the brief said.
IEEPA fares no better, since an "express condition" for invoking IEEPA is that the president "identify an unusual and extraordinary threat to the national security, foreign policy, or economy of the United States" and "declare a national emergency 'with respect to such threat'" under the National Emergencies Act. There's been no such declaration.
In addition, the Brazil tariff doesn't "deal with" the threats identified in the letter, which is another requirement of IEEPA, the importers said. Regarding Trump's claim that the tariff is needed to deal with the "longstanding and very unfair trade relationship" between the U.S. and Brazil, Johanna Foods and Johanna Beverage said the president is mistaken. The U.S. actually has a trade surplus with Brazil and has had a surplus with Brazil since 2008.
To the extent Trump's executive order underlying the reciprocal tariffs says duties are still needed on countries with which the U.S. has a trade surplus, but the trading partner still imposes high barriers to trade, the importers said the long-standing nature of the U.S. trade surplus with Brazil cuts against this rationale.
Specifically, the Brazil tariff, as it applies to orange juice, utterly fails to "deal with" any trade barriers to the Brazilian orange juice market, the importers argued. Orange juice production in the U.S., "particularly in Florida, has declined by over 95% in the past 25 years due to factors such as citrus greening disease, hurricanes, and urban development, rendering domestic supply insufficient to meet Plaintiffs production requirements," the brief said. Applying the reciprocal tariffs to Brazilian orange juice doesn't grow the U.S. manufacturing base or meet any other of Trump's justifications for the tariffs, the importers argued.
Regarding Trump's claim that the tariff is meant to address Brazil's treatment of Bolsonaro and attacks on free elections and Americans' free speech rights, Johanna Foods and Johanna Beverage said the letter simply contains "no explanation" as to "how or why the President’s criticisms constitute an unusual or extraordinary threat to the national security, foreign policy, or economy of the United States." There's also no known declaration of a national emergency on these fronts, the brief said.
The importers said they will suffer irreparable harm absent injunctive relief, since the tariff "will result in an estimated additional cost to Plaintiffs of at least $68 million in the first twelve months, which exceeds any single year of profits in the 30-year history of Plaintiffs’ business." The companies said the tariff will disrupt their partnerships with Brazilian suppliers, disrupt their ability to "plan and meet production requirements and manage cash flow," and force the companies to raise prices.
Without relief, the importers "face potential layoffs of 700 union manufacturing employees as well as administrative staff, reducing production capacity -- all posing an existential threat to the sustainability of Plaintiffs’ business," the brief said.