US President Donald Trump and New York Attorney General Letitia James.
Brian Snyder | David Dee Delgado | Reuters
New York Attorney General Letitia James and top prosecutors from 23 other states sued again to block President Donald Trump’s global tariff regime, just days after a landmark Supreme Court ruling overturned his previous attempt.
Their lawsuit, filed Thursday in the Court of International Trade, seeks to declare Trump’s latest tariffs illegal and order refunds to states.
Last month, the Supreme Court struck down most of Trump’s sweeping “Liberation Day” tariffs last year, saying his use of the International Emergency Economic Powers Act to impose tariffs was inappropriate.
But the president sought to maintain his signature policy by immediately announcing a new round of tariffs, based on another law, Section 122 of the Trade Act of 1974. That overall tariff rate is currently set at 10 percent, but the Trump administration has announced plans to increase it to 15 percent.
“After the Supreme Court rejected his first attempt to impose drastic tariffs, the president is causing even more economic chaos and expecting Americans to foot the bill,” James said in a statement provided to CNBC.
“President Trump is ignoring the law and the Constitution to raise taxes on consumers and small businesses,” she said.
The decision by the coalition of state attorneys general — most of whom were part of successful efforts to block Trump’s initial 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 overturned last month by the Supreme Court must repay billions of dollars.
“The President is using his authority from Congress to address fundamental problems in international payments and to address our nation’s large and serious balance of payments deficits,” White House spokesman Kush Desai said. “The administration will vigorously defend the president’s action in court.”
Abuse of the law
In their lawsuit, James and the coalition argue that Trump is misusing Section 122 of the Trade Act of 1974, which they say was designed to address specific currency imbalances possible when the United States was on the gold standard, rather than to address trade imbalances.
The attorneys general also argue that the tariffs violate the constitutional principle of separation of powers, which gives Congress the authority to impose duties, and that Trump’s levies violate the Trade Act of 1974’s requirements that they be applied consistently across countries.
The effort is “a clear attempt to evade the Supreme Court’s ruling in the case against IEEPA tariffs,” according to James.
Last year, James and 11 other states sued the Trump administration to end its initial round of tariffs. That effort was ultimately combined with lawsuits filed by small businesses hurt by the tariffs in the Supreme Court case that handed Trump one of the biggest legal setbacks of his second term.
Trump and James have had their own legal troubles.
His administration’s Justice Department indicted James in October on two counts, bank fraud and making false statements to a financial institution.
James, however, faces no charges after a judge threw out his indictment and two grand juries separately declined to restart those efforts.
Correction: A previous version of this story misstated the timing of the lawsuit filed by James and other state attorneys general.
