Two dozen states asked a federal court to block the tariffs that President Donald Trump instituted last month after the U.S. Supreme Court struck down his previous tariffs.
The lawsuit, filed in the federal Court of International Trade, aims to strike down the president’s latest attempt at imposing tariffs, calling them illegal and requesting refunds to states. Last month, the Supreme Court ruled that Trump overstepped his authority implementing sweeping tariffs last year.
Immediately after the ruling, Trump announced a new set of tariffs based on a different law. The new tariffs use Section 122 of the Trade Act of 1974 and set the global tariff rate at 10%, though the administration has suggested that they intend to increase it to 15%.
“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,” White House spokesman Kush Desai told States Newsroom. “The Administration will vigorously defend the President’s action in court.”
The lawsuit contends that the statute the White House is relying on has never been put into use – and the Trump administration is applying it improperly.
“This statute has never been used ever at all in the history of this country,” Oregon AG Dan Rayfield said on a conference call with reporters about the lawsuit. Rayfield called the law “archaic,” adding that it was originally intended to be used when the country still operated on the gold standard, which the country moved away from for a fiat system.
In their lawsuit, the 24 states said Trump’s justification for using the law “is fatally flawed” because he redefines key terms to force the statute to authorize tariffs. Specifically, they argue, the term “balance of payments” refers to a currency crisis “that was of great concern” in the early 1970s when U.S. currency was tied directly to gold – but that doesn’t apply since the nation ended the gold standard in 1976.
Since the 1974 law was crafted to deal with issues relating to the country’s economy under a different monetary system and does not address tariffs, the AGs contend that its use is wholly illegal.
“A trade deficit is not a ‘balance of payments’ deficit. These are not the same thing at all. The president doesn’t know the difference or he doesn’t care,” Arizona AG Kris Mayes said. “Either way, he is breaking the law again.”
The lawsuit also contends that Trump’s tariffs violate the Constitution’s separation-of-powers principle, which was a core argument in the first tariffs lawsuit – one with which the Supreme Court agreed.
“If he had the support of Congress, he could have legally passed his tariffs by now,” Rayfield said. “But the truth is he doesn’t have the support of Congress, nor does he have the support of the American people, and he is doing an end run.”
Although the first tariffs lawsuit took nearly a year to resolve, Mayes said the AGs are confident the recent Supreme Court ruling means they will swiftly win injunctions against the implementation of Trump’s second round of tariffs.
“We are hoping to get a quicker decision based on the very resounding, we think, victory we achieved in the Supreme Court,” she said, adding that they are hoping for a preliminary injunction against the tariffs being implemented in the near term as the case works its way through the process.
“I think we’re pretty confident or we would not be here,” New York AG Letitia James said, letting out a small chuckle, when asked if they believe they will be successful in this second lawsuit.
James herself has had her own personal legal battles with Trump whose Department of Justice indicted her on two counts of bank fraud and making false statements to a financial institution.
The indictment was thrown out and two grand juries declined separate efforts by the DOJ to bring the charges back.
“At the end of the day for us this is not about political gamesmanship – this is about making sure our communities don’t pay the price for President Donald Trump’s inability to take an L,” California AG Rob Bonta said.
Attorneys general from the states of Arizona, Oregon, California and New York are leading the charge on the new lawsuit. They are joined by the AGs of Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Rhode Island, Vermont, Virginia, Washington and Wisconsin. The governors of Kentucky and Pennsylvania are also part of the new lawsuit.
