From a boxy office and warehouse complex in Vernon Hills,Illinois,about twenty miles north of Chicago’s O’Hare airport,Rick Woldenberg has a firsthand view of how global capitalism works-or how it worked until recently. the Princeton-educated sixty-five-year-old is from an entrepreneurial family. In the nineteen-sixties,his father founded a business to supply schools with products designed to aid learning,such as reading and math kits. In the nineteen-eighties, his mother founded a sister business, which initially supplied other firms in the same industry. As then, the Woldenberg family’s companies, which are now called Learning Resources and hand2mind, have grown into a business that employs more than five hundred people and sells everything from letter blocks to building kits, along with Cooper, a coding robot.

Woldenberg joined Learning Resources in 1990 and became it’s chief executive eight years later.As 2019, he has also been running hand2mind. The companies’ products are designed in Vernon hills and Torrance, California, where they have another office, but virtually all of the items are manufactured in Asia, principally in China. Some of them enter through O’Hare, but most are shipped to ports on the West Coast, and then delivered by rail to the Illinois warehouse or sent to customers. These days, distributors include Scholastic, Walmart, and Amazon.

In the early years, the Woldenbergs made some of their toys and learning aids at factories in the United States. But, in the eighties and early nineties, they moved almost all of their production to factories in China and Taiwan, where assembly-line workers earned a fraction of what their American counterparts did.”Everyone was finding lower-cost manufacturers overseas to build their products, and U.S. manufacturers couldn’t match them,” Woldenberg told me a few weeks ago, over coffee at the O’Hare Hilton. “We were in the most competitive consumer market in the world, and I didn’t think we had a choice.” He said that moving production offshore had enabled the business to hire more people in the United States, including product designers, salespeople, administrative staff, and warehouse workers. “I don’t feel guilty about what we have done,” he said. “We have created more than five hundred well-paying jobs, and our products sell in more than a hundred countries.” (according to Circana, a market-research firm, Learning Resources is the twenty-fifth-largest toy company in the U.S.)

On April 2nd,which Donald Trump termed “Liberation Day,” the President announced blanket tariffs that raised the levy on chinese imports to a hundred and forty-five per cent, upending Woldenberg’s business model-and many like it. Tariffs are essentially taxes, and importers have a choice of absorbing the cost themselves or passing it on to consumers, in the form of higher prices. Woldenberg said he quickly calculated that paying the new levies would wipe out his firms’ profits. About a week before I met with him, the White House announced that tariffs on Chinese goods would be reduced for ninety days, to thirty per cent, while negotiations between the two countries took place. Woldenberg welcomed this news,but,in a business where manufacturing orders have to be placed months before the goods arrive on U.S. shores, it did little to relieve the uncertainty and chaos that Trump’s tariff policies have created. “How am I supposed to make a business plan under these circumstances?” Woldenberg said.”I don’t even know what my costs are going to be. I’m living in a reality-television show, not reality.”

Woldenberg’s first response to the Liberation Day tariffs was to pause his plans to build a new warehouse. His second response was to sue Trump and the Administration. On April 22nd, lawyers acting for Learning Resources and hand2mind filed a lawsuit in federal court, in Washington, D.C., which labelled Trump’s tariffs “an extraordinary Executive Branch power grab” that was “irreparably harming” the two businesses. Under the Constitution, the suit said, Trump didn’t have the legal authority to levy these tariffs without obtaining the approval of Congress.It asked the court to prevent the government from collecting tariffs from the Woldenberg businesses. The suit also demanded damages.

The case was filed at a moment when major toy corporations, like Hasbro and Mattel, were standing pat, seemingly wary of confronting the White House. But Woldenberg, who holds a J.D. from the University of Chicago Law School and who worked at a corporate law firm before joining the family business, has been down this road before. In 2017, during Trump’s first term, he helped lead the toy industry’s opposition to a proposal for a “border-adjustment tax”-a kind of tariff-that Republicans, under pressure from the Administration, were thinking about including in their big tax-cutting bill.(The proposal didn’t make it into the final legislation.) Now that Trump has sidestepped Congress and claimed the right to impose tariffs at will, Woldenberg is taking on the White House directly. “In the past, I’ve supported both parties, and I don’t think of myself as a political person,” he said, in explaining the decision to sue. “But I will defend our mission, and I’ll defend our employees. This is a legacy business, and I feel a certain obligation for it. I won’t let Mr. Trump take it away from us.”

There are trade statutes that empower the President to levy tariffs in specific cases, such as when a foreign country has been engaging in unfair trade practices. but these laws don’t cover blanket tariffs of the sort Trump introduced on April 2nd. The Administration,in announcing the levies,rather cited a different statute,the International Emergency Economic Powers Act (I.E.E.P.A.) of 1977, which previous Presidents have used to freeze foreign assets during national-security crises. At a court hearing in Washington a couple of weeks ago, lawyers for the Justice Department argued that Trump’s tariffs were a national-security issue and that a decision against the Administration would “kneecap the President on the world stage, cripple his ability to negotiate trade deals and imperil the government’s ability to respond to . . . future national emergencies.” (The government also asked the court to transfer the case to another venue, the federal Court of International trade, in Manhattan, where trade-related cases are often heard.) In a ruling on May 29th, Judge Rudolph Contreras rejected the Administration’s arguments and issued an injunction preventing the government from collecting import duties from Learning Resources and hand2mind. “This case is not about tariffs via tariffs,” Contreras wrote. “It is about whether IEEPA enables the President to unilaterally impose, revoke, pause, reinstate, and adjust tariffs to reorder the global economy. The court agrees with Plaintiffs that it does not.”

On the face of things, this ruling handed a momentous win to Woldenberg, who attended the hearing with his wife and three grown children, all of whom work for the business.Judge Contreras’s decision came just one day after a federal court had struck down some of Trump’s Liberation Day tariffs. On May 28th, a panel of three judges hearing two separate cases before the Court of International Trade had ruled that the April 2nd tariffs “exceed any authority granted to the president by IEEPA.” These cases were brought, respectively, by five small businesses supported by a libertarian legal group, and by a posse of Democratic state attorneys general.

The adverse rulings in the two courts were a major legal setback for the White House. It’s still far from clear, though, whether they will lead to any major changes in Trump’s tariff policies-or to lasting relief from its provisions for Woldenberg’s businesses and others in similar predicaments. Judge Contreras initially delayed enforcement of his order for fourteen days, to give the Administration time to appeal, and last week he suspended the injunction while that process works its way through the D.C. Circuit Court of Appeals. meanwhile,the Court of International Trade order blocking Trump’s tariffs had already been put on hold.A day after the verdict, the U.S. Court of appeals for the Federal Circuit stayed it, pending further legal arguments.