In the US and elsewhere, it had been hoped that the Supreme Court’s decision on 20 February striking down President Donald Trump’s unilateral tariffs as unconstitutional might bring some clarity to international trade, specifically the question of what, if any, duties might be applied to imports. The court’s ruling found that the tariffs Trump had imposed under an emergency powers law were unconstitutional, including the sweeping “reciprocal” tariffs he levied on nearly every country. The tariffs were found by six members of the Supreme Court to be unconstitutional, since the power of taxation and to unilaterally set and change tariffs belongs to Congress and not the president.
Any clarity gained was quickly dispelled by Trump’s decision that same day to impose tariffs of up to 15% under a different emergency powers law on goods from all other countries. Unlike the earlier tariffs, these new levies only last for 150 days unless they are extended by Congress. Just as his earlier tariffs were challenged in the courts, the new regime was quickly met with lawsuits from attorneys general in 22 states, as well as the governors of Kentucky and Pennsylvania. Adding to the confusion is a 4 March ruling by a federal judge in New York that companies that had paid tariffs struck down by the Supreme Court are due refunds.
‘Everything is on fire’
To Pierre Valentin, the former in-house legal counsel at Sotheby’s in the mid-1990s and currently a London-based lawyer specialising in art law, “everything is on fire, or at least that’s how it feels whenever Washington starts talking about tariffs. Markets begin to sway like nervous tightrope walkers.”
Others are attempting to see just how taut that tightrope is. Millicent Creech, an antiques dealer in Memphis, Tennessee—home to the global headquarters of FedEx, one of the companies suing the federal government for tariff payments it had made—says: “When I heard the Supreme Court’s ruling, I, as many others, let go almost a year’s tension and regained hopes for the future and my ability to survive as a dealer, and to restock. By 5pm, those hopes were dashed by the alternate method of collecting 10% tariffs, which quickly turned into 15%.”
Adding to Creech’s worries is uncertainty about whether or not the tariff exemption for antiques over 100 years old will remain in place and “if the courts will be effective in enforcing their rulings”, which has not always been the case during the second Trump presidency. One solution, which the New York-based antiques dealer Clinton Howell now relies on, is to only source material that is already in the US, “so I haven’t had to deal with all this”, he says. But for Creech, “there is not enough of the quality, condition and uniqueness of what I seek in the US”, requiring her to source materials in the UK.
A recent example of Creech’s exasperation was her attempt to purchase an 18th-century British chair in the UK, which the seller was offering “at lunch-money level. But when I tried to get shipping estimates, the first two shippers I contacted are not shipping furniture now.” The third shipper “gave me a quote for £1,000 for a single side chair that is estimated under £200. And that is before possible tariffs and the add-ons that FedEx always has. The profit would be gone in shipping alone.”
Wait-and-see approach
Steven J. Chait, the president of New York’s Ralph M. Chait Galleries, which sells antique Asian ceramics and carved wood objects, describes his approach to the present moment as to wait and see. “We haven’t brought anything in from abroad yet, and I’m not clear on what the adjusted rate will be,” he says. “I have heard mixed opinions that China is in a different category but, hopefully, the tariff amount for antiques and works of art will go down to 10% or 15% rather than the high 20s. But it will not be zero, at least to my knowledge.”
In January, the trade group to which Chait belongs, the National Antique and Art Dealers Association of America, held a meeting where the topic of tariffs was central; it expects to develop an advocacy strategy “as things clarify in the next few months”.
The art trade is also dealing with another new expense: fuel surcharges for shipping and trucking that are a by-product of the joint US and Israeli war on Iran that has led to the rapid increase in fuel costs.
Both laws cited by Trump to authorise tariffs contain exemptions, particularly for “informational materials”, a category that includes most forms of fine art, rare coins, stamps, scientific and antiquarian collectables, and antiques exceeding 100 years. But decorative art objects—including antique furniture and other collectable items—are not exempt from either set of tariffs. That has affected the price and movement of these types of objects, says Nicholas O’Donnell, a partner in the art law practice at the Boston-based firm of Sullivan & Worcester. “Many dealers made the decision not to sell things in the US.” That has also impacted the prices for objects, he says, suggesting that “sellers are absorbing the costs of the tariffs and passing them on to buyers”.
While the blanket 15% tariffs remain burdensome, “it does mitigate some uncertainties”, O’Donnell says. “Fifteen percent is a number, after all, and you can plan around it.”