MANHATTAN — The courtroom has once again become the primary battlefield for American trade policy.
On Thursday, March 5, a coalition of 24 U.S. states launched a massive legal offensive against the Trump administration, filing a lawsuit in the U.S. Court of International Trade to block the President’s newly minted global tariffs. The lawsuit, led by the attorneys general of Oregon, New York, and California, alleges that the administration is attempting an “unlawful sidestep” of a Supreme Court ruling that just weeks ago dismantled the President’s previous tariff regime.
“We’re back for round two,” declared California Attorney General Rob Bonta. “The President is attempting to use an obscure law as a tool for his tariffs, and is yet again going about it illegally.”
The Legal Maneuver: Section 122
The conflict centers on President Trump’s decision to invoke Section 122 of the Trade Act of 1974—an archaic provision that has never before been used to impose widespread duties.
Trump turned to this authority on February 20, the same day the Supreme Court ruled 6-3 that he had exceeded his power under the International Emergency Economic Powers Act (IEEPA). Within 24 hours of that defeat, the President announced a 10% worldwide tariff, later threatening to raise it to 15% by this weekend.
The States’ Argument:
- Misapplied Authority: The coalition argues Section 122 was designed solely for “balance-of-payments” emergencies (monetary crises) last seen during the Nixon era—not to combat routine trade deficits.
- Separation of Powers: The suit contends that only Congress holds the constitutional power to levy taxes (tariffs), and the President’s unilateral move “upends the constitutional order.”
- Economic Harm: Plaintiffs estimate the new “Trump tax” will cost the average American household roughly $1,200 to $1,700 per year, straining budgets for groceries, cars, and energy.
A Coalition of Resistance
The lawsuit represents a significant escalation in the domestic “Trade War.” The 24-state group includes a mix of Democratic-led hubs and industrial centers:
- Key Leaders: Oregon, California, New York, and Arizona.
- Broad Support: They are joined by Illinois, Michigan, New Jersey, Pennsylvania, and North Carolina, among others.
- The Demand: The states are asking the court for an immediate injunction to halt collection and a full refund of any duties already paid under the new order.
The White House Responds
Unbowed by the legal challenge, the administration has doubled down. Treasury Secretary Scott Bessent indicated Wednesday that the 10% rate is likely to rise to 15% later this week, dismissing the legal threats as “frivolous attempts to block American prosperity.”
President Trump, speaking at a rally earlier this week, blasted the “activist judges” and state attorneys general. “They want to keep the trade deficits high, they want to keep the jobs in other countries,” Trump told the crowd. “We’re bringing the jobs back, and we’re using the laws that are on the books to do it.”
The $130 Billion Refund Battle
The new lawsuit arrives as the administration is already reeling from a separate blow: a trade court judge ordered the government on Wednesday to begin processing $130 billion in refunds to over 2,000 businesses affected by the now-defunct IEEPA tariffs.
As the “Year of the Fire Horse” gallops forward, the American economy remains caught in a dizzying cycle of executive orders, judicial strikes, and multi-state litigation. For now, the global market watches the Manhattan court, where the definition of “emergency” will determine the price of nearly everything entering the United States.