Twenty-five states sued the Trump administration on Monday over its latest tariffs, saying the White House is using a new legal wrapper to keep taxing families and businesses after the Supreme Court struck down the earlier import taxes in February. The lawsuit says the new tariffs exceed the president’s legal authority. Same squeeze, new paperwork.
New York Attorney General Letitia James put the fight in plain language: “After losing at the Supreme Court, the administration is once again trying to illegally raise taxes on families and businesses with a new round of tariffs.” That’s the core of it. The people at the bottom pay first, while the machinery at the top keeps hunting for another route around the court’s ruling.
Who Gets Hit
The United States last month imposed double-digit tariffs on 59 countries and the European Union, saying they had not done enough to crack down on imports produced by forced labor. The new tariffs took effect just as the clock ran out on temporary tariffs President Donald Trump had turned to after the Supreme Court defeat. The forced-labor tariffs range from 10% to 12.5% and hit countries that provide 99% of American imports.
That’s a lot of pressure pushed downward through the supply chain. The administration says the tariffs target foreign practices. The bill, as usual, lands on ordinary people, importers, and businesses that have to absorb the costs or pass them along.
Trump argues that high tariffs will revive American manufacturing. Last year he overturned decades of U.S. policy that favored lower tariffs and ever-freer trade. Invoking the 1977 International Emergency Economic Powers Act, or IEEPA, he imposed double-digit tariffs on imports from almost every country, saying America’s longstanding trade deficit amounted to a national emergency. The Supreme Court ruled that IEEPA did not authorize tariffs, and the decision forced the administration to send refunds to importers who’d paid them.
Eager to make up the lost revenue, Trump turned to temporary 10% worldwide tariffs. But they expired at midnight July 24. The administration then invoked Section 301 of the Trade Act of 1974, which permits the president to impose import taxes and other sanctions against countries found to engage in unfair trade practices. Trump used Section 301 to impose big tariffs on China in his first term, and they survived court challenges.
The Legal Shell Game
The states’ lawsuit says the new tariffs are a pretext for replacing import taxes the Supreme Court struck down. It follows two other lawsuits filed in The Court of International Trade in July by small businesses that also challenged the 301 tariffs. Those lawsuits argue that the government didn’t adequately establish its case against each specific economy or spell how the tariffs will eliminate the specified practice they are being levied for, as required by Section 301.
Barry Appleton, a law professor and co-director of New York Law School’s Center for International Law, said the challenges stem from the fact that the 301 tariffs are the third time the administration has tried to impose similar worldwide tariffs under different statutes, and their “nearly copy-pasted” nature could pose a challenge to defend in court. He said the statutes used before were novelties and hadn’t been used before for that purpose, while Section 301 has been used before.
Appleton said, “Presidents have used it for decades, and Congress built it with real guardrails: investigation, consultation, a public record.” He added, “The government’s defense won’t be ‘I had no power to do this.’ It will be, ‘I stayed inside the lines Congress drew.’ That is a real fight, not a formality, and it is the one that will decide this case.”
That’s the language of the apparatus: guardrails, consultation, public record. The states and small businesses are left to drag the fight into court after the tariffs already hit.
Who’s Suing Back
Joining New York in the lawsuit announced Monday are Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Massachusetts, Maryland, Maine, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Virginia, Vermont, Washington and Wisconsin. The suit lands after the administration’s latest move to keep import taxes alive through another statute, even after the Supreme Court said the earlier version went too far.
White House spokesman Kush Desai defended the tariffs, saying, “The United States is using its lawful authority to obtain the elimination of unreasonable acts, policies, and practices that burden U.S. commerce. A foreign country’s failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor is unreasonable and burdens U.S. commerce, including American workers, and must be addressed. Section 301 tariffs have proven to be a legally durable tool since the President’s first term, and they remain so now.”
The administration calls it lawful authority. The states call it illegal taxation. Between those two claims sits everyone who has to pay the price while the powerful argue over which statute lets them do it.