US President Donald Trump and New York Attorney General Letitia James.
Brian Snyder | David Dee Delgado | Reuters
New York Attorney General Letitia James and the top prosecutors of 23 other states is suing again to block President Donald Trump’s global tariff system, just days after a landmark Supreme Court decision quashed his previous efforts.
Their lawsuit, filed Thursday with the International Trade Court, seeks to declare Trump’s recent tariffs illegal and order refunds to states.
Last month, the Supreme Court invalidated most of Trump’s sweeping “Liberation Day” tariffs that he introduced last year, saying his use of the International Emergency Economic Powers Act to impose tariffs was inappropriate.
But the president tried to keep his previous policies alive by immediately announcing a new wave of tariffs based on another law, Section 122 of the Trade Act of 1974. The global tariff rate is currently 10%, but the Trump administration has said it will increase it to 15%.
“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,” James said in a statement to CNBC.
“President Trump disregards the law and the Constitution to effectively raise taxes on consumers and small businesses,” she said.
The move by the coalition of attorneys general — most of whom were part of the successful effort to block Trump’s original tariffs — adds to the ongoing international uncertainty created by the president’s tariff policies. On Wednesday, a federal court ruled that companies that paid tariffs struck down by the Supreme Court last month must pay billions of dollars in refunds.
“The President is using his authority granted by Congress to address fundamental international payments problems and address our nation’s large and severe balance of payments deficits,” White House spokesman Kush Desai said. “The government will vigorously defend the president’s lawsuit in court.”
Abuse of law
In their lawsuit, James and the coalition argue that Trump is abusing Section 122 of the 1974 Trade Act, which they say was intended to address certain currency imbalances that were possible when the U.S. was under the gold standard, rather than to address trade imbalances.
The attorneys general also argue that the tariffs violate the Constitution’s separation of powers principle, which gives Congress the authority to impose tariffs, and that Trump’s levies violate the 1974 Trade Act’s requirements that they be applied uniformly across countries.
The effort is “a clear attempt to evade the Supreme Court’s decision in the case challenging the tariffs imposed under the IEEPA,” James said.
Last year, James and 11 other states sued the Trump administration to stop the original round of tariffs. Those efforts were eventually combined with lawsuits from small businesses affected by the tariffs in the Supreme Court case, giving Trump one of the biggest legal setbacks of his second term.
Trump and James had their own legal entanglements.
His government’s Justice Department indicted James in October on two counts: bank fraud and making false statements to a financial institution.
However, James will not be charged after a judge dismissed her indictment and two grand juries declined to reopen that effort.
Correction: An earlier version of this story misstated the timing of the lawsuit by James and other attorneys general.