Trump’s new tariffs face legal challenge by group of states

President Donald Trump is facing a major legal challenge to the fresh global tariffs he imposed on goods entering the U.S. after the Supreme Court struck down his earlier sweeping duties last month.

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Attorneys general from New York, California and Oregon said Thursday that a group of states is planning to file a lawsuit in the Court of International Trade over Trump’s order placing a 10% tax on imports that took effect Feb. 24. The president has said he plans to increase the levy to 15%.

Thousands of U.S. companies are already seeking refunds for about $170 billion paid under the earlier tariffs that were overturned, which Trump issued under the International Emergency Economic Powers Act, or IEEPA. 

Trump’s new tariffs were issued under a different law — Section 122 of the Trade Act of 1974. The statute has never been used before to levy tariffs, but allows the president to issue limited duties to address a major “balance of payments” deficit.

The states allege Trump’s rationale for the new tariffs — the U.S. trade deficit — was improper under Section 122. They said the U.S. no longer has balance-of-payments problems because those can only occur in a fixed-rate exchange system like the gold standard, which the country abandoned decades ago.

“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,” New York Attorney General Letitia James, who is co-leading the lawsuit, said in the statement.

The White House didn’t immediately respond to an email request for comment.

The president pivoted to Section 122 after the Supreme Court last month invalidated tariffs he’d issued under the International Emergency Economic Powers Act, or IEEPA, another law that had never previously been used to issue tariffs. The 6-3 decision was handed down in two landmark cases, one of which was filed by Democratic state attorneys general.

The clash over Section 122 is emerging just as the legal fight over refunds from Trump’s IEEPA tariffs is beginning to heat up. On Wednesday, a judge in the Manhattan-based trade court ordered the Trump administration to halt a key step in the tariff payment process in order to make any refunds simpler.