Twenty-five states launched a lawsuit against the Trump administration today, challenging new tariffs they claim illegally raise taxes on families and businesses. New York Attorney General Letitia James stated the administration is "once again trying to illegally raise taxes on families and businesses with a new round of tariffs" after a prior defeat in the Supreme Court.
These new tariffs, ranging from 10% to 12.5%, were imposed last month on 59 countries and the European Union. They target nations providing 99% of American imports. The administration justified these measures by stating the countries had not done enough to crack down on imports produced by forced labor.
The State's Hand in Capital Accumulation
President Donald Trump, who advocates for high tariffs to revive American manufacturing, overturned decades of U.S. policy favoring lower tariffs and freer trade last year. He previously invoked the 1977 International Emergency Economic Powers Act (IEEPA), declaring America’s longstanding trade deficit a national emergency to impose double-digit tariffs on imports from nearly every country. The Supreme Court, however, ruled in February of the same year that IEEPA did not authorize such tariffs. This decision forced the administration to issue refunds to importers who had paid the tariffs.
Eager to recoup this lost revenue, the administration then implemented temporary 10% worldwide tariffs. These temporary measures expired just days ago, on July 24. The administration subsequently 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 had previously used Section 301 to impose significant tariffs on Chinese imports during his first term, which survived court challenges.
White House spokesman Kush Desai asserted the United States is using its "lawful authority to obtain the elimination of unreasonable acts, policies, and practices that burden U.S. commerce." Desai specifically cited a foreign country’s failure to enforce a prohibition on goods produced with forced labor as "unreasonable and burdens U.S. commerce, including American workers," requiring action. He maintained that Section 301 tariffs have proven to be a "legally durable tool" since the President’s first term.
Who Pays the Price
Joining New York in the lawsuit 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. These states contend the new tariffs exceed the president’s legal authority. The lawsuit by these 25 Democratic-led states follows two other lawsuits filed in July by small businesses in The Court of International Trade. These businesses also challenged the 301 tariffs, arguing the government failed to adequately establish its case against specific economies or detail how the tariffs would eliminate the specified practices, as Section 301 requires.
Legal Maneuvers, Not Structural Change
Barry Appleton, a law professor and co-director of New York Law School’s Center for International Law, noted that the 301 tariffs represent the administration's third attempt to impose similar worldwide tariffs under different statutes. He suggested their "nearly copy-pasted" nature could pose a challenge in court. Appleton explained that while previous statutes used for tariffs were novelties, Section 301 has a history of use by presidents for decades, with "real guardrails" built by Congress, including investigation, consultation, and a public record. The legal battle, he concluded, will center on whether the government "stayed inside the lines Congress drew," rather than questioning the state's fundamental power to impose such economic burdens.