States Sue Trump Administration Over New Global Tariffs Imposed Under Trade Act
A coalition of 24 U.S. states filed a federal lawsuit on March 5 challenging the Trump administration’s newly imposed global tariffs, arguing the president unlawfully used a rarely invoked trade statute to reinstate duties after the U.S. Supreme Court invalidated much of his earlier tariff program. The lawsuit, filed in the U.S. Court of International Trade in New York, seeks to block a 10 percent tariff on most imported goods and obtain refunds for payments already collected.
The dispute follows a February 20 decision by the U.S. Supreme Court striking down a large portion of tariffs the administration had previously imposed under the International Emergency Economic Powers Act. The Court ruled that the statute did not give the president authority to impose tariffs. Within hours of that decision, President Donald Trump announced a new tariff program using a different legal provision, Section 122 of the Trade Act of 1974, imposing a 10 percent duty on most imports. Treasury Secretary Scott Bessent has since indicated the rate could rise to 15 percent.
The states bringing the lawsuit include New York, California, Oregon, Illinois, Massachusetts, Washington, and several others. Their complaint asks the court to declare the new tariffs unlawful, prevent federal agencies from enforcing them, and require the federal government to refund tariffs collected under the program.
At the center of the dispute is Section 122 of the Trade Act of 1974, a law that allows the president to impose temporary import duties in response to serious international monetary problems. Congress created the provision during a period of global currency instability in the 1970s and limited its use to short-term financial emergencies. The statute allows tariffs of up to 15 percent for no more than 150 days when the United States faces major international payment problems or significant currency disruptions. According to the complaint, the statute has never previously been used to impose tariffs in the decades since it was enacted.
The states argue the administration is relying on the law for a purpose Congress never intended. According to the lawsuit, Section 122 was designed to address currency-related financial crises, not routine trade imbalances like the deficit the administration has cited as justification for the tariffs.
The lawsuit also centers on the difference between a trade deficit and a balance of payments deficit. A trade deficit occurs when a country imports more goods than it exports. A balance of payments deficit is broader and measures all financial flows between countries, including investment and capital transfers.
The states argue the administration treated the nation’s trade deficit as evidence of a balance of payments crisis. The complaint says that when foreign investment and financial inflows are included, the United States’ overall balance of payments position is close to neutral rather than deeply negative. The states claim that means the legal conditions required to trigger Section 122 have not been met.
The lawsuit also raises constitutional concerns about who has the authority to impose tariffs. Under Article I of the Constitution, Congress holds the power to impose taxes, duties, and other import charges. Presidents may exercise tariff authority only when Congress clearly delegates that power through legislation. The states argue that by invoking Section 122 without meeting its statutory conditions, the administration exceeded the limits of that delegation and took authority that belongs to Congress.
The complaint describes the tariff proclamation as an “ultra vires” action, a legal term used when government officials act beyond the authority granted to them by law. The states also challenge how federal agencies implemented the tariffs under the Administrative Procedure Act, arguing that U.S. Customs and Border Protection enforced duties that lack statutory authorization.
The states say the tariffs are already causing financial harm. State governments regularly purchase equipment, materials, and supplies that rely on imported components. Tariffs can increase those costs directly and may also raise prices for goods produced in the United States that rely on imported parts. The complaint cites research indicating that most tariff costs are typically paid by American consumers and businesses rather than foreign exporters.
The lawsuit also argues that rapidly changing tariff policies create administrative burdens for public agencies. State officials say shifting tariff rates can complicate procurement contracts, vendor pricing, and budgeting decisions.
The lawsuit names President Trump, the United States, the Department of Homeland Security, and U.S. Customs and Border Protection. A White House spokesperson said the administration will defend the tariffs in court and argues the president is exercising authority granted by Congress to address international payment imbalances.
The states are asking the court to declare the tariff proclamation unlawful, block its enforcement, and order the federal government to refund tariffs collected under the program.
