U.S. states mount court challenge to Trump’s tariffs

U.S. President Donald Trump smiles as he speaks in the Oval Office of the White House, Tuesday, May 20, 2025, in Washington. (AP Photo/Alex Brandon)

NEW YORK - Twelve U.S. states will ask a federal court on Wednesday to halt President Donald Trump’s “Liberation Day” tariffs, arguing that he overstepped his authority by declaring a national emergency to impose across-the-board taxes on imports from nations that sell more to the U.S. than they buy.

A three-judge panel of the Manhattan-based Court of International Trade will hear arguments in a lawsuit brought by the Democratic attorneys general of New York, Illinois, Oregon, and nine other states. They say the Republican president has sought a “blank check” to regulate trade “at his whim.”

The states claim the president badly misinterpreted a law called the International Emergency Economic Powers Act to justify the tariffs. The law is meant to address “unusual and extraordinary” threats to the U.S.

Trump has said the U.S.’s decades-long history of importing more than it exports is a national emergency that has harmed U.S. manufacturers. But the states argue the U.S. trade deficit is not an “emergency” and that IEEPA does not authorize tariffs at all.

The same three-judge panel heard arguments last week in a similar case brought by five small businesses, and it is expected to issue a decision in the coming weeks.

Oregon Attorney General Dan Rayfield said that the tariffs were raising prices for Oregon families and small businesses, and they will cost the average family an extra US$3,800 a year.

“President Trump imposed his tariffs without Congress, public input, or restraint – and claims the courts can’t review his decisions," Rayfield said. “This is a misuse of emergency powers.”

The Justice Department has said the states’ lawsuit should be dismissed because the states have only alleged “speculative economic losses” instead of concrete harms from the tariffs. It has also argued that only Congress, not U.S. states or the courts, can challenge a national emergency declared by the president under IEEPA.

A DOJ spokesperson said the department “will continue to vigorously defend President Trump’s agenda to confront unfair trade practices in court.”

After imposing tariffs on China, Mexico and Canada in February, Trump imposed a 10 per cent across-the-board tariff on all imports in April, with higher rates for countries with which the U.S. has the largest trade deficits, particularly China. Many of those country-specific tariffs were paused a week later, and the Trump administration temporarily reduced the steepest tariffs on China this month while working on a longer-term trade deal.

Trump’s on-again-off-again tariffs have shocked U.S. markets. He has framed them as a way to restore U.S. manufacturing capability.

The states’ lawsuit is one of at least seven court challenges to Trump’s tariff policies. California has filed a separate challenge in federal court in San Francisco, and other lawsuits have been filed by businesses, legal advocacy groups and members of the Blackfeet Nation.

Decisions from the court, which hears disputes involving international trade and customs laws, can be appealed to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., and ultimately the U.S. Supreme Court.

Reporting by Dietrich Knauth, Editing by Alexia Garamfalvi and David Gregorio, Reuters