Some two dozen U.S. states and Democratic governors filed a lawsuit Thursday challenging President Donald Trump’s new global tariffs, arguing he used a trade statute in a way that exceeds his legal authority. The complaint targets import taxes Trump imposed after the Supreme Court struck down his prior tariff effort, according to the states and governors involved in the case.
Attorneys general and governors in the lawsuit say the administration is overstepping by relying on Section 122 of the Trade Act of 1974 for what they describe as sweeping tariff measures. They argue the tariffs are not consistent with how Section 122 was meant to be used and contend the costs will flow to states, businesses and consumers.
The lawsuit centers on the administration’s planned 15% tariffs “on much of the world,” the filing says, after a Supreme Court loss that cut off Trump’s earlier approach. The states and governors argue that Trump cannot pivot to Section 122 as a replacement for the prior authority, which the Supreme Court ruled against, and they say the wording in Section 122 does not cover the kind of trade deficits the administration points to.
Oregon Attorney General Dan Rayfield, one of the lawsuit leaders, said, “The focus right now should be on paying people back, not doubling down on illegal tariffs.” The suit comes after a judge ruled the day before that companies that paid tariffs under Trump’s earlier framework should receive refunds, according to the report.
White House spokesman Kush Desai said the administration would defend the new tariffs in court and argued Trump is acting within the power granted by Congress. Desai said, “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,” adding, “The Administration will vigorously defend the President’s action in court.”
The plaintiffs say the costs of the tariffs will be borne by Americans, including through higher prices. Arizona Attorney General Kris Mayes pointed to a Federal Reserve Bank of New York study and said the cost had been estimated at $1,200 a year per household, calling it “money out of the pockets of American families trying to buy groceries, pay rent and keep their small businesses afloat.”
The tariff dispute draws on a key legal distinction raised in the litigation: the administration’s new tariffs are tied to Section 122, which allows the president to impose tariffs of up to 15% for a limited period unless Congress extends them, while Trump’s earlier tariffs were imposed under the International Emergency Economic Powers Act. The Supreme Court struck down the earlier IEEPA tariffs Feb. 20, and four days later Trump invoked Section 122 to impose 10% tariffs, with Treasury Secretary Scott Bessent telling CNBC the administration planned to raise the levies to the 15% ceiling this week.
Section 122’s language, and whether it covers trade deficits, is central to the dispute. The provision’s critics argue Section 122 is aimed at “fundamental international payments problems,” and that the trade deficit—what the U.S. sells versus what it buys—fits a different category. A separate point raised in the reporting is that the provision originated from financial crises in earlier decades when the dollar was tied to gold, and that critics say the statute’s original rationale does not map neatly onto today’s monetary system.
The lawsuit is being brought in the specialty federal court that handles such trade matters, the report says. It also notes that Trump’s legal options were not limited to Section 122, and that some other tariff authorities Trump has used during his presidency have survived court challenges, including duties imposed on Chinese imports under Section 301 of the Trade Act of 1974.
Besides the attorneys general leading the case—Rayfield, Mayes and their counterparts in California and New York—the lawsuit also includes additional state attorneys general and governors from across the country.