Twenty-five states filed a lawsuit Monday challenging the Trump administration's latest tariff scheme, arguing it's an illegal attempt to resurrect import taxes the Supreme Court already struck down earlier this year. The new tariffs hit countries providing 99% of American imports with rates ranging from 10% to 12.5%.
New York Attorney General Letitia James didn't mince words. "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," she said.
A Pattern of Legal Gymnastics
The administration's approach reveals a telling pattern. After the Supreme Court ruled in February that the 1977 International Emergency Economic Powers Act didn't authorize tariffs, Trump turned to temporary 10% worldwide tariffs to keep revenue flowing. Those expired just days ago on July 24. Now the administration has invoked Section 301 of the Trade Act of 1974, claiming 59 countries and the European Union haven't done enough to crack down on forced labor in their imports.
The timing isn't coincidental. The new tariffs took effect precisely as the temporary ones expired, ensuring American families and businesses face uninterrupted higher costs on everyday goods.
Joining New York in the challenge 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. It's a diverse coalition spanning coastal and interior states, representing millions of workers and consumers bearing the burden of these import taxes.
Who Pays the Price
Trump argues high tariffs will revive American manufacturing. But economists widely agree that tariffs function as taxes paid by American importers and ultimately passed on to consumers through higher prices. Last year, he overturned decades of U.S. policy favoring lower tariffs and freer trade, imposing double-digit tariffs on imports from almost every country by declaring America's trade deficit a national emergency.
When the Supreme Court forced the administration to refund importers who'd paid those tariffs, the government scrambled to replace the lost revenue. That desperation now manifests in these forced-labor tariffs affecting nearly all American imports.
White House spokesman Kush Desai defended the action, claiming "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." He pointed to Section 301 tariffs Trump imposed on China during his first term, which survived court challenges.
Legal Questions Mount
But this lawsuit isn't the only challenge. Two other lawsuits filed in July by small businesses argue the government didn't adequately establish its case against each specific economy or explain how the tariffs will eliminate forced labor practices, as Section 301 requires.
Barry Appleton, a law professor and co-director of New York Law School's Center for International Law, noted the challenges stem from this being the administration's third attempt to impose similar worldwide tariffs under different statutes. Their "nearly copy-pasted" nature could prove difficult to defend in court, he said.
"Presidents have used it for decades, and Congress built it with real guardrails: investigation, consultation, a public record," Appleton said. "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."
Unlike the novel legal theories the administration tried earlier, Section 301 has established precedent and procedural requirements. That means courts will scrutinize whether the administration actually followed the law's investigative and consultative mandates, or simply slapped a new legal label on the same rejected policy.
Why This Matters:
The lawsuit represents more than a technical legal dispute over presidential authority. It's about whether working families will continue paying higher prices for groceries, clothing, and household goods through what amounts to a nationwide sales tax increase. These tariffs affect 99% of imports, meaning virtually every American household faces higher costs while the administration cycles through different legal justifications for the same policy the Supreme Court already rejected. The challenge also tests whether procedural safeguards Congress built into trade law actually constrain executive action, or whether an administration can simply repackage rejected policies under new statutory labels. For the 25 states involved, the stakes include protecting their residents from what they view as illegal tax increases disguised as trade policy, while defending the principle that even presidents must operate within the boundaries courts and Congress establish.