A coalition of 24 U.S. states has launched a legal offensive against the latest round of sweeping tariffs ordered by Donald Trump, arguing the move is an unlawful attempt to revive a policy already struck down by U.S. Supreme Court.
The challenge, filed before the U.S. Court of International Trade, targets a fresh 10% global tariff the administration rolled out immediately after the high court invalidated large portions of earlier duties placed on imported goods. The states contend the president is simply repackaging the same strategy under a different legal label.
Among the states backing the lawsuit are California, New York, and Oregon, all arguing that the new tariffs misuse provisions of the Trade Act of 1974. That statute allows temporary duties during severe balance-of-payments crises, but the states say the administration is stretching it to address ordinary trade deficits — a problem they argue the law was never meant to tackle.
Officials backing the lawsuit say the maneuver sidesteps the constitutional role of Congress in setting trade policy. According to them, the tariffs have already triggered steep economic consequences, burdening businesses and state economies with mounting costs.
The administration insists the policy is legitimate. A White House spokesperson said the president is exercising authority granted by Congress to respond to what it calls serious imbalances in international payments and the country’s persistent trade deficits.
Tariffs have become a defining feature of Trump’s second-term economic agenda. But that strategy took a major hit in February when the U.S. Supreme Court ruled that the International Emergency Economic Powers Act did not give the president the sweeping authority he claimed to impose earlier tariffs.
Within hours of that setback, Trump issued a new order invoking Section 122 of the Trade Act of 1974, a rarely used provision that allows tariffs of up to 15% for a period of 150 days. The administration has already signaled that the current 10% rate could soon climb to 15%.
Under the statute, Congress would have to approve any extension beyond the 150-day window.
The states argue the administration is misreading the law’s intent. The balance-of-payments clause was designed for a bygone monetary system in which foreign governments could exchange U.S. dollars for American gold reserves — a situation far removed from today’s trade environment.
The lawsuit also asks the trade court to halt the new tariffs immediately and order refunds for any duties already collected under the disputed authority.
The legal battle arrives as the trade court is already wrestling with roughly 2,000 claims from importers seeking refunds for more than $130 billion in earlier tariff payments made before the Supreme Court’s February ruling. The court has recently directed U.S. customs officials to begin processing those repayments, setting the stage for what could become one of the largest tariff refund exercises in U.S. history.
