States led by New York sue to block Trump's latest tariffs, calling them an illegal end-run around Supreme Court

• States claim Trump is misusing Section 122 of the 1974 Trade Act, which was designed to address monetary imbalances under the gold standard rather than trade imbalances
• The lawsuit argues the tariffs violate constitutional separation-of-powers principles and the Trade Act's requirement for consistent application across countries
• A federal court ruled Wednesday that companies are due billions of dollars in refunds for tariffs invalidated by the Supreme Court

Summary: States Sue to Block Trump's Revised Tariff Plan

Key Development:

New York Attorney General Letitia James, alongside prosecutors from 23 other states, filed a lawsuit Thursday in the Court of International Trade to block President Trump's revised global tariff regime and demand refunds for states.

Legal Background:

The lawsuit follows the Supreme Court's recent invalidation of Trump's "Liberation Day" tariffs, which were imposed under the International Emergency Economic Powers Act (IEEPA). After this defeat, Trump announced new tariffs using Section 122 of the Trade Act of 1974 as legal justification, currently set at a 10% global rate.

Legal Arguments:

The state coalition contends Trump is misusing Section 122, which was designed to address monetary imbalances under the gold standard, not trade imbalances. They argue the tariffs violate:

• Constitutional separation of powers granting Congress authority over duties
• The 1974 Trade Act's requirement for consistent application across countries
• Statutory rules governing tariff implementation

Market Implications:

The lawsuit adds to ongoing international economic uncertainty surrounding Trump's tariff policies. A separate federal court ruling Wednesday determined that companies that paid the Supreme Court-invalidated tariffs are entitled to billions of dollars in refunds, creating significant financial exposure for the administration.

Political Context:

This represents the latest legal confrontation between Trump and James, who previously faced a dismissed federal indictment in October 2025 on bank fraud charges that two grand juries declined to revive.

Administration Position:

Treasury Secretary Bessent stated the global 15% tariff would begin implementation this week, with plans to return to previous rates within five months.