States Sue Trump, Challenging New Tariffs Post-Supreme Court Setback

New York Attorney General Letitia James, alongside the top prosecutors from 23 other states, has once again initiated legal action to block President Donald Trump’s global tariff regime. This latest lawsuit, filed in the Court of International Trade, comes mere days after a significant Supreme Court decision that invalidated his prior attempt to impose sweeping duties. The states are seeking to have Trump’s newest tariffs declared illegal and to secure refunds for those affected.

The Supreme Court’s ruling last month struck down the majority of Trump’s "Liberation Day" tariffs, implemented the previous year. The court determined that the President’s use of the International Emergency Economic Powers Act (IEEPA) to impose these duties was an improper exercise of authority. However, President Trump quickly moved to sustain his signature policy by announcing a new series of tariffs, this time leveraging Section 122 of the Trade Act of 1974. The current global tariff rate under this provision stands at 10%, with the Trump administration signaling its intention to increase it to 15%.

Attorney General James expressed strong criticism of the President’s actions, stating in a release provided to CNBC, "After the Supreme Court rejected his first attempt to impose sweeping tariffs, the president is causing more economic chaos and expecting Americans to foot the bill." She further asserted, "President Trump is ignoring the law and the Constitution to effectively raise taxes on consumers and small businesses."

This coordinated challenge by the coalition of state attorneys general, many of whom were instrumental in the successful prior effort to block Trump’s original tariffs, amplifies the existing international uncertainty surrounding his trade policies. The legal landscape has seen further developments, with a federal court ruling on Wednesday that companies which paid tariffs subsequently struck down by the Supreme Court are now entitled to billions of dollars in refunds.

Responding to the lawsuit, White House spokesman Kush Desai defended the administration’s position. "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," Desai stated. "The Administration will vigorously defend the President’s action in court."

Misuse of Law Alleged in New Legal Challenge

In their filing, Attorney General James and the coalition argue that President Trump is misapplying Section 122 of the 1974 Trade Act. They contend that this provision was originally designed to address specific monetary imbalances that existed when the U.S. was on the gold standard, rather than to combat contemporary trade imbalances.

The attorneys general also raise constitutional concerns, asserting that the tariffs violate the principle of separation of powers, which grants Congress the authority to levy duties. Furthermore, they claim that Trump’s levies contravene the 1974 Trade Act’s requirements for consistent application across all countries.

Attorney General James characterized the latest legal maneuver as "a clear attempt to escape the Supreme Court’s ruling in the case against the tariffs imposed under IEEPA."

This is not the first time Attorney General James has led a legal charge against the President’s tariff policies. Last year, she, along with 11 other states, filed a lawsuit to halt the administration’s initial round of tariffs. That legal battle was eventually consolidated with suits from small businesses impacted by the tariffs, culminating in the Supreme Court case that delivered a significant legal setback for President Trump during his second term.

It is noteworthy that President Trump and Attorney General James have themselves been involved in legal entanglements. In October, the Justice Department, under the Trump administration, indicted James on two counts: bank fraud and making false statements to a financial institution. However, these charges were subsequently dismissed by a judge, and two grand juries declined to pursue further action.

Correction: A previous version of this story contained an inaccuracy regarding the timing of the lawsuit filed by Attorney General James and the other state attorneys general.