25 States Sue Over Trump's New Tariffs

A coalition of 25 U.S. states, led by New York and California, filed a lawsuit against the Trump administration over new tariffs ranging from 10% to 12.5% on goods from 60 trading partners. The states argue that these tariffs exceed presidential authority and are being used as a pretext to replace import taxes struck down by the Supreme Court in February.

The lawsuit, filed in the U.S. Court of International Trade, seeks to halt the tariffs, declare them unlawful, and order refunds for duties already paid. New York Attorney General Letitia James stated that "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." California Attorney General Rob Bonta echoed this sentiment, calling it President Trump's third attempt to impose such tariffs.

The states involved include Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Massachusetts, Maryland, Maine, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Virginia, Vermont and Wisconsin. The lawsuit follows previous challenges by small businesses.

The Trump administration imposed the tariffs under Section 301 of the Trade Act of 1974. This section permits the president to impose import taxes and other sanctions against countries found to engage in unfair trade practices. The White House defended these tariffs as a response to foreign countries' failure to enforce prohibitions on goods produced with forced labor.

In response, White House spokesman Kush Desai said the levies were an appropriate and legal response to unfair trade practices in other nations."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," Desai said.

Analysts suggest that the Trump administration is leveraging new legal tools to sustain its trade policies after a Supreme Court ruling struck down earlier tariffs imposed under different laws. The states' complaint alleges that U.S. Trade Representative Jamieson Greer rushed investigations into 60 economies, bypassed required country-specific consultations and failed to explain why nearly uniform tariff rates were appropriate for economies with widely different policies.

The latest round of global tariffs imposed in July affect more than 99 percent of US imports. The states’ complaint argues that the new tariffs used “forced labor” as a pretext to re-impose the tariffs that had already been ruled illegal in court, and that a sweeping tax on imports would do nothing to address the real problems of forced labour around the world.

The Office of the U.S. Trade Representative (USTR) announced the new levies on July 23, targeting 60 trading partners, including the European Union. The Democratic-led states strongly refute this reasoning, insisting in the lawsuit that “the Administration cannot use forced labor as a pretext to continue its illegal tariff scheme. The tariffs the USTR imposed are so broad that they defy the USTR’s own stated aims and make a mockery of the statute used to justify them.”

California Attorney General Rob Bonta, who co-led the coalition, claimed Trump is “so intent on raising the cost of living for Americans that he is willing to break law after law after law to do so." "Tariffs are taxes, and the American people cannot and should not shoulder the extra costs that come from the President’s failed and illegal economic policy—no matter how much the President wants them to," he added.

All of the states have Democratic attorneys general or governors. Per the lawsuit, the 25 states are arguing that the USTR mishandled its investigations into alleged forced labor malpractices."Over the past four months, USTR sought public comments and testimony regarding its Section 301 investigation. However, the comments and testimony the USTR compiled do not support implementing tariffs as a method to combat forced labor; rather, the comments and testimony show that the USTR acted arbitrarily and capriciously," the lawsuit alleges.

In a statement shared with Time, White House spokesperson Kush Desai said “the United States is using its lawful authority to obtain the elimination of unreasonable acts, policies, and practices that burden U.S. commerce." Section 301 tariffs have "proven to be a legally durable tool since the President’s first term, and they remain so now," he added.

This is just the latest roadblock Trump has been met with in his efforts to install global tariffs. When the Supreme Court ruled in February that the President lacked the authority to impose his "Liberation Day” tariffs under the International Emergency Economic Powers Act (IEEPA), a 1977 statute intended for national emergencies, Trump labeled the decision “deeply disappointing" and said he was “ashamed of certain members of the court."

The Administration responded by imposing a 10% temporary import duty under a different legal authority, Section 122 of the Trade Act of 1974. A coalition of states sued the Trump Administration in March, arguing that the President's use of Section 122 exceeded the limited authority granted under the statute.

In May, the U.S. trade court ruled that the specific Section 122 tariffs challenged in that case were unlawful, but the levies stayed in place while the Administration appealed. Those temporary levies were due to expire at midnight on July 24. The Administration announced this new round of tariffs the day before.

When asked at the time if he was confident his latest levies would withstand legal scrutiny, Trump insisted the “very standard tariffs” had previously been approved in “thousands of cases."

The Trump administration has refunded about $100bn in tariffs since the Supreme Court ruled against its use of emergency powers to impose duties on dozens of trade partners. The administration collected about $166bn from US importers before the court struck down a large portion of the president’s tariff regime in February.

In a court filing, the U.S. Customs and Border Protection (CBP) disclosed that it had returned more than three-quarters of $128.68bn in tariff revenues earmarked as “potential and certified refunds.” The Supreme Court found that Trump exceeded his authority when he invoked the 1977 International Emergency Economic Powers Act (IEEPA) to impose fentanyl-related tariffs on Canada, Mexico, and China, and broader “reciprocal” tariffs on more than 90 countries.