A coalition of 24 U.S. states plans to challenge in court the Trump administration's recently imposed 10% global tariffs, arguing the White House lacks the legal authority to reimpose such duties after the U.S. Supreme Court struck down a large portion of prior tariffs under a different statute.
The lawsuit, to be filed in the U.S. Court of International Trade in New York, claims the administration improperly relied on Section 122 of the Trade Act of 1974. The states, many led by Democratic attorneys general and including New York, California and Oregon, say the Trade Act's emergency provisions are designed to counter balance-of-payments crises rather than to redress routine trade deficits that arise when a wealthy economy imports more than it exports.
The tariffs were announced in a February 20 executive order imposing an immediate 10% levy on imports for a 150-day period. U.S. Treasury Secretary Scott Bessent said on Wednesday that the 10% rate could rise to 15% later in the week. The states contend those duties are unlawful under the Trade Act and that the statute was never intended to serve as a vehicle for the sweeping tariff strategy the administration has pursued during the president's second term.
The legal dispute follows a significant blow to the administration on February 20, when the Supreme Court invalidated much of the president's earlier tariff program that had been implemented under the International Emergency Economic Powers Act. The high court's decision held that IEEPA did not supply the broad authority the administration had claimed to impose tariffs on imported goods.
In response to the Supreme Court ruling, the administration announced a new set of duties under Section 122 of the Trade Act of 1974 - a statute that, according to the states, had not previously been used to impose tariffs. The states' complaint argues that the Trade Act allows remedies only to address a balance-of-payments deficit, a condition the statute associates with acute monetary disturbances such as a sharp depreciation in the dollar. The states note that the last time the Trade Act's balance-of-payments measures were invoked was during the Nixon presidency when the United States was moving away from the gold standard.
State officials say the administration is misapplying Section 122 to target ordinary trade deficits instead of monetary emergencies. They are asking the court to enjoin the new tariffs and to order refunds of any tariff payments already collected under the Section 122 authority.
Separately, the court is handling roughly 2,000 suits from businesses seeking refunds for more than $130 billion in tariff payments that importers made under the IEEPA-based program prior to the Supreme Court decision. In an interim step on Wednesday, the court directed U.S. Customs to begin processing refunds related to those IEEPA payments.
The administration has also imposed other tariffs under more conventional legal authorities on categories such as autos, steel and aluminum; those measures are described in the states' filing as being less vulnerable to litigation because they rest on established statutory grounds.
The states' action represents the first organized state-level legal challenge to the new 10% global levy. It frames the dispute as one over statutory scope and the proper use of emergency trade law, asking the judiciary to resolve whether the Trade Act can be used in the manner the administration has adopted.
Legal posture and next steps
The complaint will test competing interpretations of two federal statutes. The states argue Section 122 is limited to balance-of-payments emergencies and cannot be repurposed to address routine trade deficit concerns. The administration, having moved quickly after the Supreme Court's IEEPA ruling, has asserted alternate statutory authority to maintain its tariff program while continuing to make tariffs a central element of its trade policy.
Pending the court's decision, the states seek an order blocking the tariffs and requiring refunds for any sums collected under Section 122. At the same time, the Court of International Trade is processing a large volume of refund petitions stemming from the earlier IEEPA-based duties, an undertaking that already has prompted an order to U.S. Customs to begin refund processing.
The litigation could have broad implications for importers, manufacturers and sectors that rely on global supply chains if the courts limit or block the administration's use of the Trade Act. The challenge underscores continuing legal uncertainty about the boundaries of executive authority to impose tariffs without express congressional approval.