California launched a bold legal challenge against President Donald Trump today, filing a federal lawsuit to halt his sweeping tariff regime, which the state argues is an unlawful power grab that threatens its economy.

The first state to confront Trump’s protectionist trade agenda head-on, California claims the tariffs—imposed under the International Emergency Economic Powers Act (IEEPA)—are illegal, unprecedented, and already wreaking havoc on its farmers, businesses, and families.

As global markets reel and trade tensions fray U.S. alliances, the lawsuit marks a pivotal clash over presidential authority and the future of American trade.

The lawsuit, filed in the U.S. District Court for the Northern District of California, seeks to void Trump’s tariffs, including a 10% levy on all imports and higher duties on China, Mexico, and Canada. Governor Gavin Newsom, a vocal critic of Trump, announced the action on X.

“Donald Trump does not have the authority to unilaterally impose the largest tax hike of our lifetime with his destructive tariffs. We’re taking him to court,” he said.

The suit argues that Trump’s use of the IEEPA, a 1977 law meant for economic emergencies like sanctions, not tariffs—exceeds his powers, violating the Constitution’s assignment of tariff authority to Congress.

Attorney General Rob Bonta, joining Newsom at a 1:30 p.m. ET press conference in the Central Valley, called the tariffs “chaotic and haphazard,” adding, “As the fifth largest economy in the world, California understands global trade policy is not just a game.”

The state contends that the tariffs inflict “immediate and irreparable harm,” threatening its $491 billion import and $183 billion export markets, with over 40% of trade tied to Mexico, Canada, and China. From almond growers to Silicon Valley tech firms, California’s industries face soaring costs and retaliatory barriers, with Newsom’s office estimating billions in damages already.

California’s economy, larger than all but four countries, is uniquely exposed to Trump’s tariffs. The state’s ports handle a third of U.S. imports, and its farmers rely on foreign markets for nuts, fruits, and vegetables. The tariffs, which have driven a $6 trillion S&P 500 plunge since early April, are projected to raise household costs by $3,800 annually, per the Yale Budget Lab, hitting low- and middle-income families hardest. Tech giants like Apple, dependent on Chinese components, and automakers face supply chain chaos, while post-wildfire rebuilding efforts stall due to pricier imported materials like steel and timber.

“Californians are bracing for fallout,” Bonta told NBC News, citing threats to Central Valley farmers, Sacramento small businesses, and “worried families at the kitchen table.”

Newsom has scrambled to shield the state, urging trading partners to exempt California exports from retaliation, but with no deals secured, the lawsuit represents a last stand to protect jobs and growth.

White House Fires Back

The Trump administration hit back hard, framing California’s lawsuit as a distraction from the state’s domestic woes. White House spokesman Kush Desai told CNBC, “Instead of focusing on California’s rampant crime, homelessness, and unaffordability, Gavin Newsom is spending his time trying to block President Trump’s historic efforts to finally address the national emergency of our country’s persistent goods trade deficits.”

Desai defended the tariffs as critical to reviving U.S. industries, vowing the administration would use “every tool at our disposal, from tariffs to negotiations.”

Trump, who declared April 2 “Liberation Day” for American trade, has justified the tariffs under IEEPA by citing trade deficits, $1.2 trillion in goods in 2024, as a national emergency. His executive order imposes a 10% tariff on all imports starting April 5, with higher rates for countries like China (54% total) and non-USMCA goods from Mexico and Canada (25%), effective April 9. The White House argues these measures protect workers and curb reliance on foreign supply chains, pointing to exemptions for steel, semiconductors, and energy to soften domestic blowback.

California’s lawsuit joins a growing wave of legal challenges to Trump’s tariffs, though none carry the state’s economic clout. The Liberty Justice Center, representing small businesses, sued on April 14 in the U.S. Court of International Trade, and the New Civil Liberties Alliance filed a Florida case on April 3, both arguing IEEPA doesn’t authorize tariffs. California’s case, however, leverages the Supreme Court’s “major questions doctrine,” asserting that actions with vast economic impact—like tariffs—require clear Congressional approval, which IEEPA lacks.

Global and Domestic Ripples

Trump’s tariffs have sparked a global trade war, with China imposing 84% duties on U.S. goods and allies like Canada and Mexico mulling retaliation. Over 75 countries are said to be negotiating exemptions, with Japan, South Korea, and the EU securing 90-day reprieves. California, meanwhile, faces isolation as its pleas for exemptions falter, amplifying the urgency of its legal push.

Domestically, the lawsuit reignites Newsom’s feud with Trump, who faced over 120 California suits in his first term.

Newsom said this is about protecting American families from chaos, casting the fight as a defense of national interests. But critics, including Desai, argue it’s political grandstanding, diverting focus from California’s budget deficit and social challenges.

California’s lawsuit could reshape U.S. trade policy and test the limits of executive power. A victory for Newsom and Bonta might unravel Trump’s tariffs, easing economic strain but emboldening other states to challenge federal authority. A loss could cement Trump’s ability to wield IEEPA unchecked, with tariffs becoming a permanent fixture.

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Boeing, a cornerstone of American aerospace, is facing significant challenges as it finds itself entangled in the escalating U.S.-China tariff war, with China ordering its airlines to halt deliveries of Boeing jets and U.S. aircraft parts in retaliation to President Donald Trump’s 145% tariffs on Chinese goods.

The move has sent Boeing’s stock tumbling and raised concerns about its market share in China, a critical growth region. However, analysts at Goldman Sachs remain optimistic, citing Boeing’s ability to weather similar disruptions during Trump’s first term when China also suspended purchases, suggesting the company’s long-term survival is not at risk.

The U.S.-China trade conflict intensified in April 2025, with Trump imposing tariffs as high as 145% on Chinese imports, prompting China to retaliate with 125% tariffs on U.S. goods, including aircraft. This tit-for-tat escalation led China to direct its airlines, including state-owned giants Air China, China Eastern, and China Southern, to stop accepting Boeing jet deliveries and halt purchases of U.S.-made aircraft parts, according to Bloomberg. The order effectively doubles the cost of Boeing planes for Chinese carriers, rendering new purchases economically unfeasible.

A notable example of the fallout came from China Southern Airlines, which suspended the sale of 10 used Boeing 787-8 Dreamliners on April 11, 2025, citing “matters affecting the property transaction,” as reported by Nikkei. This decision may reflect either China’s directive or the prohibitive costs imposed by the 125% tariffs. Boeing’s stock fell 2.4% on April 15, 2025, contributing to a 12% year-to-date decline, underscoring investor fears about the company’s exposure to the trade war.

China is a vital market for Boeing, expected to account for 20% of global aircraft demand over the next two decades, with Airbus forecasting 9,500 new deliveries to China by 2043. In 2018, nearly 25% of Boeing’s aircraft deliveries went to China, but trade tensions and internal issues, including the 2019 grounding of the 737 Max, have curtailed new orders. Boeing’s 2024 annual report warned of risks from “deterioration in geopolitical or trade relations,” noting that failure to deliver to China or secure future orders could reduce deliveries and market share.

Caught in the Crosshairs

Boeing’s plight is compounded by its existing challenges, including a mass workers’ strike, financial losses, and scrutiny following a 737 Max 9 door plug incident in January 2024. The trade war now threatens to erode its competitive position against Europe’s Airbus and China’s domestic manufacturer, COMAC. China’s top three airlines had planned to take delivery of 179 Boeing planes between 2025 and 2027—45 for Air China, 53 for China Eastern, and 81 for China Southern—deals worth billions now in jeopardy.

The halt on U.S. parts imports could also disrupt COMAC’s C919 and C909 programs, which rely on American components, but Chinese airlines may increasingly turn to Airbus or COMAC for new orders, further squeezing Boeing’s market share. Airbus, with manufacturing facilities in the U.S., is better positioned to absorb tariff-related costs and has already dominated Western airliner exports to China in recent years. Analyst Wouter Dewulf from the University of Antwerp noted that Boeing faces higher production expenses and reduced profit margins, as it struggles to pass on tariff-induced costs.

Global carriers are also reacting cautiously. Ryanair’s CEO, Michael O’Leary, told the Financial Times that the airline might delay Boeing deliveries if tariffs raise costs.

“We might delay them and hope that common sense will prevail,” he said.

Delta has similarly indicated potential delays, reflecting broader industry concerns about tariff-driven price hikes.

Goldman Sachs’ Optimism

Despite these challenges, Goldman Sachs analysts, led by Noah Poponak, argue that Boeing’s survival is not at stake, drawing parallels to China’s suspension of Boeing purchases during Trump’s first term (2017-2021). In a note to clients on April 15, 2025, Poponak wrote, “We think the impact to Boeing is very small because China had already stopped taking Boeing deliveries and stopped ordering Boeing aircraft during the last Trump administration, such that there is no real reduction to implement.”

During Trump’s first term, China imposed tariffs of 25% on U.S. goods, and Boeing deliveries to Chinese carriers were minimal, with the country grounding the 737 Max in 2019 after two fatal crashes. Since January 1, 2018, Chinese customers have ordered only 28 Boeing aircraft, representing just 2% of Boeing’s order backlog, which is sold out through 2030 with other customers. Approximately 25 737-8 MAX aircraft, produced before 2023, remain undelivered to China, but Goldman Sachs notes that Boeing can redirect these jets to other airlines, mitigating short-term financial impacts.

Goldman Sachs’ confidence stems from Boeing’s substantial order backlog, valued at $350 billion, and its ability to reallocate deliveries globally. The firm also points out that Airbus lacks the capacity to fully replace Boeing in China, limiting immediate competitive losses. While acknowledging long-term risks, such as reduced market share if China shifts to Airbus or COMAC, Goldman Sachs believes Boeing’s global demand and production flexibility provide a buffer against the current trade war’s effects.

Trump’s Stance and Potential Economic Impact

The U.S.-China tariff war, with trade valued at over $650 billion, risks a broader economic standstill, with Goldman Sachs estimating a 45% probability of a U.S. recession. Trump has framed his tariffs as a tool to curb drug trafficking and support domestic manufacturing, but his policies have sparked global market volatility, with the S&P 500 losing nearly $6 trillion in value over four days in early April 2025. On April 15, Trump wrote on Truth Social, stating that China “just reneged on the big Boeing deal, saying that they will ‘not take possession’ of fully committed to aircraft,” though the specifics of the deal remain unclear.

China’s Foreign Ministry, through spokesman Lin Jian, emphasized a commitment to “handshakes rather than fist fights,” but its 125% tariffs and non-tariff measures, such as limiting Hollywood imports and slowing rare earth exports, signal a robust retaliatory stance. Some analysts, like international aviation consultant Neil Hansford, argue that China may suffer more, given its post-COVID aircraft shortage, but the immediate impact on Boeing is undeniable.

Boeing’s 36 suppliers in China, which produce components for all its current models, face disruptions from the parts import ban, potentially increasing production costs. While Goldman Sachs remains sanguine about Boeing’s short-term resilience, the long-term outlook depends on the duration and severity of the tariff war. A prolonged exclusion from China, which Boeing called a “significant market” in its 2024 report, could erode its competitive edge, especially as COMAC’s C919 gains traction.