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California Governor Gavin Newsom announced that the state plans to file a lawsuit to prevent the implementation of Donald Trump’s extensive tariffs. This legal action challenges the former president’s unprecedented use of emergency powers to alter global trade dynamics. The lawsuit, set to be filed by Newsom and State Attorney General Rob Bonta on Wednesday, represents the second legal challenge against Trump’s “reciprocal” tariffs. This legal action could potentially result in judicial limitations on the president’s trade authority.
Earlier this month, Trump imposed steep “reciprocal” tariffs of up to 50% on the US’s major trading partners, although these were subsequently paused temporarily, leaving a 10% levy in place for most countries. Governor Newsom commented that these tariffs are unlawfully causing disruptions for California’s families, businesses, and the economy, leading to increased prices and job threats.
The lawsuit, which will be introduced in the District Court for the Northern District of California, seeks a court declaration to nullify the tariffs imposed by Trump and prevent their enforcement. Although Trump’s aides suggested several legal frameworks for imposing tariffs, most required the government to undertake studies, delaying their implementation. Instead, Trump opted to use the International Economic Emergency Powers Act of 1977 (IEEPA), permitting immediate levies during a national emergency.
To justify this, the Trump administration declared a national emergency, citing national and economic security concerns arising from persistent US goods trade deficits. The California lawsuit follows another lawsuit filed by the Liberty Justice Center in the US Court of International Trade on behalf of five small US businesses. Attorneys in this case argue that IEEPA should only be activated by an “unusual and extraordinary threat” to national security, and contend that the US trade deficit does not meet this criterion. They also highlight that the administration has applied tariffs to countries with which there is no trade deficit, undermining its justification.
The California lawsuit maintains that IEEPA does not authorize the president to impose tariffs and asserts that such significant economic actions should require congressional approval. The success of either legal challenge in obstructing the “reciprocal” tariffs would be a significant setback for Trump’s trade agenda, though it would not impact sector-specific tariffs on steel, aluminum, and automobiles, which the administration applied using different US laws.
Governor Newsom, elected in 2018 and viewed as a prospective Democratic presidential candidate, stated that the lawsuit represents American families affected by ongoing disruptions. According to Newsom’s office, California ranks as the world’s fifth-largest economy and hosts the Port of Los Angeles, the busiest in the US, which would be especially vulnerable to a trade slowdown with China.
