25 States Sue Trump Over Latest Tariffs in New Legal Challenge

The lawsuit is the latest in a string of legal battles over Trump’s tariff strategy. The Supreme Court in February ruled his global levies under the International Emergency Economic Powers Act illegal. The president then imposed 10% global tariffs under Section 122 of the Trade Act, which a trade court also ruled illegal but allowed to remain in effect during appeal. Those Section 122 tariffs expired last month.

Janet Whittaker, senior counsel at Clifford Chance in Washington, said the core of the states’ claim is that the stated reasoning is pretextual. Even so, she said the new lawsuits may face “stronger headwinds” than earlier challenges. “Unlike both IEEPA and Section 122, Section 301 has an established history as a tariff authority and requires the administration to undertake a multi-step notice, consultation, and investigative process before it can act,” Whittaker said. “In contrast with IEEPA, the Section 301 authority to impose tariffs is clear.” A key question for the Court of International Trade will be how much deference to give the administration’s investigative findings, she said.

A separate lawsuit by two small businesses – spice importer Burlap and Barrel Inc. and watch retailer Collective Horology LLC – challenges the tariffs on similar grounds. They allege the trade representative failed to conduct a “country-specific inquiry” as Congress intended. The businesses filed as a proposed class action covering all importers who will pay the new duties.

The administration continues to face fallout from the invalidated IEEPA tariffs. Customs authorities are processing refund demands for the roughly $166 billion in levies collected under those rules.