When the US Supreme Court last week struck down US import tariffs and ruled that President Donald Trump had unlawfully imposed them last April, the hero of the day was Victor Schwartz, the owner of a small New York wine import company. He decided to sue the President of the United States himself, regardless of the risk. How did he experience his adventure? Victor Schwartz gave an interview to Czech Radio from his New York office.
by Jana Ciglerová
It’s almost been a year since you filed your lawsuit. What kind of year was it?
For many people in our country, it was a year of chaos, instability, uncertainty, and expense. A terrible year. I started my business 40 years ago, I’ve been through a lot of different things. We’ve been through 9/11. We’ve been through a recession, a lot of things, but nothing like this. It was probably the worst year in the history of business.
The government basically cut itself off. They inherited a country and an economy that was recovering from the pandemic but was headed in the right direction. And they just ruined it, they just created chaos, they had no plan, no idea what the consequences would be, they didn’t listen to the experts who told them that tariffs were the wrong way to go.
You import wine into the United States, so you can’t convert your business to domestic production out of principle.
We import 30 percent of our goods, but remember that even domestic products depend on foreign products or ingredients.
There is no retailer in America that sells exclusively domestic wine, that’s not possible. We have to buy from abroad, all the sophisticated machinery that winemakers use is made in Austria or Switzerland. Italy makes the corks, the boxes, the glass. We live in a globalized world and tariffs are like closing the borders. And that doesn’t work.
Can you describe to our listeners how you dealt with tariffs on different goods and from different countries?
The container arrives at the port. You fill out the paperwork and they tell you how much you’re going to pay – you owe us this much in fees. There are tariffs that we still have to pay, and then there are tariffs.
So they tell you: Do you want your goods? Pay this much and that much. We import from 16 countries. At one point, Trump threatened 50 percent tariffs on everything from the European Union. We have hundreds of products, and for some of them we had to change the price lists four times in a row.
How does that affect the price of wine? Do you increase it or absorb it?
We can’t absorb it, our margins aren’t big enough. It’s a low-margin business. So no, it’s not big enough to absorb an extra 15 percent. Don’t forget the dollar has dropped by almost 50 percent. So our costs have gone up by 30 percent.
And did you lose customers?
We lost business, not customers. We had to find cheaper products. For example, a restaurant told us they couldn’t charge $25 for a bottle. So we had to find one that would only cost $20.
When we ordered a particular wine, we didn’t even know it would have such a duty. It takes months for wine to get here from Europe. It’s complicated. We’re a small company, I can’t go to the capital market to get money to pay the duties. So we cut back. We reduced our inventory. We had to pressure our suppliers to wait much longer for payments from us.
Do you know how much money you lost?
We do. That’s why we filed this lawsuit. We were one of five companies that came together and, through the law firm Liberty Justice Center, were part of that lawsuit.
You were the one who spoke the most for those five companies. Why did the others choose you as their leader?
That’s a good question. Maybe because we had a very clear story about how tariffs affect us. Our company is on the front lines. We import products from abroad. We bring containers into the port and pay tariffs on them. We are a clear example of why tariffs are bad. We’ve been in business for 40 years and we’re a family-owned company. So our story has a lot of advantages.
Were you reluctant to go to court when you had to go against the president?
I only found out later that others didn’t want to go because they were afraid of the president, of course. You know, our company’s slogan has been “Courageous Import” for several years now. Originally, I meant that we have the courage to import wines or liqueurs that people have never heard of, from small producers. But during the legal process, the slogan took on another meaning.
And were you afraid?
You know, fearlessness doesn’t mean you don’t have fear. It means the courage to face fear, to know what it is, but to have the courage to face it. So it’s actually fearlessness, which is more about fighting fear and having the courage to admit it, but still moving forward. That’s what I would say. So yes, we had to move forward, we had to do something. Because our country is really threatened, it’s still in a fragile situation.
But when you filed that lawsuit, did you expect to win?
When I said I was going to do it, I thought I was going to get into some kind of class action lawsuit. I had no idea about the law. I just knew the tariffs were bad. I didn’t even know anything about the constitutionality of using tariffs under the IEEPA [a 1977 law that allows tariffs to be imposed in the event of a threat to national security, ed.] .
It wasn’t until I got into it that I realized how many arguments we had to win the case with. I think there were nine in total, showing why the law was being misused.
You are such an American story – a small person who took on a big giant and won.
Yes, but remember that small businesses make up about two-thirds of business in America. Together we are big. We won because we were right. We had to win, we had justice on our side. It’s a big story.
We knew we should win, we had a strong case. I realized it in the Court of International Trade in New York. Last May, we heard the government’s arguments, and it suddenly became clear to me. How could we lose? Their case is so weak, we thought. It was shocking how weak their defense was.
And when you heard the Supreme Court justices argue this, did you feel like you were going to win?
Yes, but I was still worried. Because you know how many justices Trump appointed to the court? I thought they were going to go against us. But when I heard the questions, especially from Amy Coney Barrett, who asked a lot of interesting, tough questions, I felt hopeful. And then Neil Gorsuch came in and took everyone’s breath away. I highly recommend you read his reasoning for the verdict. It’s very good.
Since then, I’ve stopped thinking about if we’ll win, but when and how we’ll win. Six to three or five to four? That’s the difference. Five to four sounds like a close result, six to three is a definite.
When you found out last Friday that you won, how did it feel?
It was like winning gold. It was amazing. A wave of emotions, I was crying, it was just unbelievable. It was an amazing feeling, finally getting to this stage. You know, almost a year of life.
It was a tough year in many ways. For Americans, for business… A lawsuit where you’re suing the powerful United States government. But it was a year where I really had to focus and keep my balance.
Moreover, in a case that is so important to the president and at the same time crucial to the rest of the world, not just the United States. Do you also get feedback from abroad?
Oh my God, and what kind! I think I could run for Prime Minister of Italy and win. For some reason, the Italians really embraced my story, they see it as David and Goliath, a small man against a big giant.
I get letters and calls from all over the world, even from Japan. I get a lot of positive feedback from all over America. That’s the best part, these really heartfelt messages from real people sending me sincere words of praise and appreciation. It’s fantastic.
Do you have any new orders because people want to support you?
We sell wholesale, we don’t sell to individual consumers. I don’t know how the business is going to be now. I think in general it doesn’t necessarily affect our orders. People don’t follow the news that closely. Until they pay a lot of money for eggs, they don’t see anything. Then it becomes a big deal.
What happens next? Will you get your money back? Will you sue for it?
Of course we are entitled to a refund. Anyone who has paid duty under the IEEPA is entitled to it. It is the government’s duty to return our money to us. That is the verdict of the Supreme Court. It ruled that the government acted unlawfully. They must return our money. It is not an option. They charged us something they should not have charged us.
Do you know how much that is?
How much will we get back? Yes, it’s a lot of money.
What did you think of the president’s reaction, attacking a judge and then imposing new tariffs?
He’s reacting very harshly and childishly. He’s supposed to be taking care of the people and the business community in this country, but when we saw his reaction, it feels like he’s punishing us.
It’s as if he’s saying, “Yeah, so you think you’re going to get away with this? No way. You know what? We have other ways. We’ll get you another way.”
Is this how he supports the business community? Who can think like this? After all – to be clear – no one in the business community supports tariffs.
But the president said that foreign companies would pay the tariffs.
Yes, he said that, but he says a lot of things that are not true. And this is not true either. It is 100% false. Goldman Sachs and the New York Fed have published studies that have been cited by many economists and that show that no foreign companies pay tariffs. I don’t know of any foreign companies that pay tariffs, look at the statistics.
Tariffs are paid by American businesses. The president took money from my pocket and the pockets of other business people and took it from us illegally. Now he has to give it back. Nobody who works at the level of business that I do, with small family businesses, has the money to just absorb an extra 15 percent.
That’s passed on to American consumers, who pay for it. And it’s slow, it can take a long time for these economic forces to work their way through the system. So Americans haven’t felt the full impact of the tariffs yet. When they do, they’re going to be unhappy, and they’re already unhappy. Look at the polls, they’re not good. Americans, among other things, are unhappy with the economy.
The president is now imposing new tariffs. Does your lawyers’ analysis show that he has the authority to do so?
Can I tell you what our lawyer says? He’s a very reputable lawyer. That particular law is being misapplied again, because it should only be used in the event of a major balance of payments problem, not a trade problem. Trump claims there is a balance. But that’s like saying I have a balance of trade problem with my corner store because I buy a lot more from it than it buys from me.
Have you faced any threats for leading this lawsuit against the government?
We’ve received a lot of nasty messages, yes, but no physical threats. If we had, we would have reported it to the police right away.
You’ve been doing business in New York for over 40 years. Donald Trump is from New York. Did you run into him before he was president?
That’s pretty funny. Not personally, but through close friends. Both Donald and Ivana Trump. They cheated on payments in various business areas. They cheated on suppliers all the time. But it’s well known.
Ivana did this to a friend of mine who is a graphic designer. She did commissioned artwork for her and then she said, “I’ll only pay you half, take it or leave it.”
That was outrageous. I don’t work like that, but they do. To them, business means one person loses and the other person wins. We shouldn’t work like that, we should work in a way that makes it a win-win situation.
Do you know that Ivana was Czech?
Of course. But I won’t blame you. Just like you, don’t blame me that Donald Trump is American.
Do you sell any Czech wines?
No, the closest wines I sell are from Hungary.
But you didn’t drink your victory to that, did you?
Everyone asks me about that! I love the diversity of wine. That’s what fascinates me about wine, that one night I can have a wine from one region, one country. The next night it’s something else, and that’s the beauty of wine. The beauty lies in the diversity. It’s interesting.
Are you optimistic about the future of your business now?
Yes. Things will get better. But that doesn’t mean it won’t be hard. I mean, there are a lot of tough times ahead, no doubt about it.
What are your tariffs now? Ten percent? Fifteen?
We had a 15 percent IEEPA tariff from Europe, which has been out for a few days now. But I don’t know for sure until I ask my customs broker. My understanding is that anything that was at sea before Tuesday – so it’s already shipped – will not be subject to IEEPA tariffs. And the new tariffs went into effect on Tuesday. But I could be wrong, because we’re living in very uncertain times. So I don’t know.
