U.S. President Donald Trump’s plans to realign global trade are facing another legal battle after more than 20 states filed a lawsuit on March 5 challenging his latest worldwide tariffs.
Trump implemented the 10% global duty after the U.S. Supreme Court ruled on Feb. 20 it was not legal for Trump to impose trade levies using the International Emergency Economic Powers Act, better known as IEEPA.
Trump replaced the IEEPA tariffs with a 10% worldwide tariff using Section 122 of the 1974 Trade Act. That duty can only increase to 15%, and it will expire after 150 days unless Congress votes to extend it.
Like the IEEPA tariffs, these latest duties do not apply to goods compliant under the U.S.-Mexico-Canada Agreement on trade.
In the latest lawsuit filed in the U.S. Court of International Trade, Democratic attorneys general and governors argued that Trump is overstepping his power. The lawsuit comes the day after a judge at the New York-based trade court ordered refunds for companies that paid Trump’s IEEPA tariffs.
Oregon, Arizona, California and New York are leading the new lawsuit. They’re joined by the attorneys general of Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Rhode Island, Vermont, Virginia, Washington and Wisconsin, and the governors of Kentucky and Pennsylvania.
The states say Trump can’t use Section 122 — which has never previously been invoked — because it was intended to be used only in specific and limited circumstances, including when there are “large and serious balance-of-payments deficits.”
— The Canadian Press contributed to this article.
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