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 are planning to file a new lawsuit to block President Donald Trump’s global tariff regime, just days after a landmark Supreme Court decision overturned their previous effort.
Their lawsuit, expected to be filed Thursday in the Court of International Trade, will seek to deem Trump’s latest tariffs illegal and order refunds to states.
Last month, the Supreme Court invalidated most of Trump’s sweeping “Liberation Day” tariffs implemented last year, saying his use of the International Emergency Economic Powers Act to impose tariffs was inappropriate.
But the president sought to keep his signature policy alive by immediately announcing a new wave of tariffs, based on another law, Section 122 of the Trade Act of 1974. That overall tariff rate is currently set at 10%, but the Trump administration has said it plans to raise 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 provided to CNBC.
“President Trump is ignoring the law and the Constitution to effectively raise taxes on consumers and small businesses,” he said.
The move by the coalition of state attorneys general (most of whom were part of the successful effort to block Trump’s original tariffs) will add 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 should receive billions of dollars in refunds.
misuse of the law
In their lawsuit, James and the coalition will argue that Trump is misusing Section 122 of the Trade Act of 1974, which they say was designed to address specific monetary imbalances possible when the United States was on the gold standard, rather than combating trade imbalances.
The attorneys general will also argue that the tariffs violate the Constitution’s separation of powers principle that gives Congress the power to impose tariffs, and that Trump’s taxes violate the 1974 trade law’s requirements that they be applied consistently across countries.
The effort is “a clear attempt to escape the Supreme Court’s ruling in the case against tariffs imposed under IEEPA,” according to James.
Last year, James and 11 other states sued the Trump administration to stop its original round of tariffs. That effort was eventually combined with lawsuits from small businesses affected by the tariffs in the Supreme Court case that dealt Trump one of the biggest legal setbacks of his second term.
Trump and James have had their own legal entanglements.
His administration’s Justice Department charged James in October with two counts: bank fraud and making false statements to a financial institution.
James, however, is not facing charges after a judge dismissed his indictment and two grand juries separately declined to revive those efforts.
Correction: The lawsuit by James and other state attorneys general is expected to be filed Thursday. An earlier version misstated the timing.
