A coalition of state attorneys general led by Letitia James is preparing to file a new lawsuit aimed at stopping President Donald Trump’s latest global tariff regime, escalating a legal confrontation over trade policy only weeks after the Supreme Court of the United States struck down a similar effort.
The case, expected to be filed Thursday in the United States Court of International Trade, will seek to invalidate the administration’s newly announced tariffs and compel the federal government to refund states and businesses for duties already collected under the policy.
The lawsuit marks the second major legal battle over Trump’s sweeping tariff agenda and reflects growing resistance among Democratic-led states to the president’s attempt to maintain one of his signature economic policies.
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A Policy Revived After Supreme Court Defeat
The new legal challenge follows a landmark Supreme Court ruling last month that invalidated most of Trump’s earlier tariff framework, often referred to as the “Liberation Day” tariffs.
In that decision, the court ruled that the administration improperly used the International Emergency Economic Powers Act to impose sweeping import duties.
The IEEPA law is typically used to sanction foreign governments or restrict financial transactions during national emergencies, and the court concluded that its provisions did not grant the president authority to impose broad tariffs across global trade flows.
The ruling represented one of the most significant legal setbacks of Trump’s second term, striking down a central pillar of his economic strategy. Rather than abandoning the tariff initiative, the administration quickly sought a new legal foundation.
Within hours of the decision, Trump announced that his administration would implement a new global tariff under Section 122 of the Trade Act of 1974, a provision that allows temporary import restrictions in response to balance-of-payments problems.
The tariff rate is currently set at 10%, but the administration has said it intends to raise it to 15% in the coming days.
States Argue the Law Is Being Misused
The coalition of attorneys general argues that the administration is stretching Section 122 far beyond its intended purpose.
Historically, the provision was designed to allow temporary trade restrictions when the United States faced acute international payment imbalances — a problem that was more common during the era when global currencies were tied to the gold standard.
State lawyers are expected to argue that the statute was never meant to authorize sweeping global tariffs targeting dozens of countries simultaneously. In their filing, the attorneys general will also argue that the tariffs violate constitutional limits on executive power.
Under the U.S. Constitution, Congress has primary authority over tariffs and taxation, although lawmakers have historically delegated limited powers to the executive branch for specific trade actions.
The states contend that Trump’s new tariffs exceed those delegated powers.
“The president is ignoring the law and the Constitution to effectively raise taxes on consumers and small businesses,” James said in a statement announcing the legal action.
“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.”
A Growing Financial Dispute
The case arrives at a moment when the financial consequences of the earlier tariffs are already unfolding in court. On Wednesday, a federal judge ruled that companies that paid duties under the previous tariff system — which was invalidated by the Supreme Court — are entitled to billions of dollars in refunds.
That decision could force the government to repay large sums to importers who paid tariffs before the policy was struck down.
If the new tariffs are also overturned, the potential liability for the federal government could grow significantly. For businesses that depend on imported goods, the legal uncertainty has complicated planning decisions and pricing strategies.
Importers often pay tariffs months before goods reach consumers, meaning a reversal of the policy can create complicated refund claims and accounting adjustments. Trade lawyers say the situation underscores how rapidly shifting tariff policies can ripple through supply chains.
Trump’s tariff agenda has been a defining feature of his economic approach, aimed at reshaping global trade relationships and protecting domestic industries.
The administration argues that tariffs encourage companies to relocate manufacturing to the United States and reduce the country’s persistent trade deficit.
However, many economists note that tariffs raise costs for American businesses and consumers because importers frequently pass the higher costs along through prices. Industries that rely heavily on imported materials — including manufacturing, construction, and retail — have warned that broad tariffs can increase production costs and squeeze margins.
Financial markets have also been closely watching the legal battles over the tariffs, as sudden changes in trade policy can affect commodity prices, exchange rates, and corporate earnings forecasts. Analysts say prolonged uncertainty around the legality of the tariffs could weigh on business investment decisions.
The Political Divide Of U.S. Trade Policy
The lawsuit underpins the intensifying political divide over trade policy in the United States. Most of the attorneys general joining the case come from Democratic-led states that have frequently clashed with the Trump administration on economic and regulatory issues.
Many of those states were also involved in the earlier legal challenge that ultimately reached the Supreme Court. The new case is expected to argue that the administration’s latest move represents an attempt to circumvent the court’s earlier ruling rather than comply with it.
James described the tariff policy as “a clear attempt to escape the Supreme Court’s ruling in the case against the tariffs imposed under IEEPA.”
The dispute also unfolds against the backdrop of a long-running legal confrontation between Trump and James. The administration’s Justice Department indicted the New York attorney general in October on charges including bank fraud and making false statements to a financial institution.
However, a judge later dismissed the case, and two grand juries declined to revive the charges. Although those proceedings are separate from the tariff dispute, the history between the two figures has added political intensity to the legal battle.
The case will first be heard by the Court of International Trade, a specialized federal court that handles disputes involving customs law and trade policy.
Any ruling there could be appealed to higher courts and ultimately return to the Supreme Court, setting the stage for another landmark decision about the limits of presidential authority over trade. The outcome of the case could determine not only the future of the tariffs but also how far future presidents can go in reshaping U.S. trade policy without explicit approval from Congress.