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Twenty-four US states have sued the Trump administration over tariffs imposed after the Supreme Court outlawed its original levies, in the first big legal challenge to the president’s latest trade measures.
A group of Democratic state attorneys-general and governors on Thursday filed a lawsuit with the Court of International Trade to block the 10 per cent tariffs Trump announced last month. The US Supreme Court had earlier ruled that the president exceeded his authority when he established levies via emergency powers that had never been previously invoked to set duties.
While Trump’s initial wave of tariffs was imposed using the International Emergency Economic Powers Act, the new levies unveiled last month relied on a different, little-known trade law, Section 122 of the Trade Act of 1974. This statute allows the US president to impose duties of up to 15 per cent for up to 150 days.
The states accuse Trump of once again misusing a US statute. They allege he is not authorised to invoke Section 122 to impose tariffs with the aim of addressing trade deficits — and that it has never been used to impose levies.
“The focus right now should be on paying people back, not doubling down on illegal tariffs,” Dan Rayfield, Oregon state attorney-general, said in a statement on Thursday.
The filing is the latest in a series of challenges to Trump’s use of executive powers to remake global trade and enact his protectionist agenda without allowing Congress to weigh in. It could drag the president’s economic plan through another protracted court battle.
Since returning to the White House last year, Trump has pushed the US average tariff rate to the highest level since the postwar period, imposing steep duties on American allies and partners and collecting billions of dollars in revenue.
“Contrary to the purpose and limited delegation of Section 122, President Trump has invoked this statute to impose immense and ever-changing tariffs on whatever goods entering the United States he chooses and for whatever reasons he finds convenient,” the states wrote in the complaint.
Trump “has once again exercised tariff authority that he does not have — involving a statute that does not authorise the tariffs he has imposed — to upend the constitutional order and bring chaos to the global economy”, they added.
The states argue that Section 122 offers “limited tariff authority” to deal with “large and serious balance-of-payments deficits”, among other things, and that Trump’s balance of payments deficit claims are “fatally flawed”.
The president was “contorting” the term “balance of payments” and seeking to equate it to a balance of trade, they wrote.
White House spokesperson Kush Desai said the administration would “vigorously defend the president’s actions in court”.
“The president is using his authority granted by Congress to address fundamental international payments problems and to deal with our country’s large and serious balance-of-payments deficits,” said Desai.
Revenue generated from the tariffs had been expected to offset US deficits by about $3tn over the coming decade. The non-partisan Congressional Budget Office said on Thursday that the Supreme Court’s IEEPA ruling would slash that by $2tn, including the cost of servicing debt.
Additional reporting by Myles McCormick
