Democratic-led states sue Trump administration over new tariffs

A coalition of 25 Democratic-led states sued the Trump administration Monday, arguing President Donald Trump exceeded his authority by imposing sweeping tariffs on goods from 60 U.S. trading partners.

The complaint, filed in the U.S. Court of International Trade, challenges tariffs of 10% or 12.5% on most goods imported from the affected economies, which together account for 99.4% of U.S. imports, according to the states.

The states are asking the court to halt the tariffs, declare them unlawful and order refunds of duties they have paid.

"After losing at the Supreme Court, the administration is once again trying to illegally raise taxes on families and businesses with a new round of tariffs," New York Attorney General Letitia James said in a statement.

At the center of the case is the administration's effort to preserve Trump's broad tariff regime after courts rejected two earlier versions imposed under different laws. The states argue officials seized on Section 301 of the Trade Act of 1974 and forced-labor concerns as a pretext to rapidly recreate nearly identical global duties.

The White House rejected that argument.

"The United States is using its lawful authority to obtain the elimination of unreasonable acts, policies and practices that burden U.S. commerce," White House spokesperson Kush Desai said in a statement. "A foreign country's failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor is unreasonable and burdens U.S. commerce, including American workers, and must be addressed."

"Section 301 tariffs have proven to be a legally durable tool since the president's first term, and they remain so now," Desai added.

The administration imposed the tariffs after accusing the countries and European Union of failing to prevent goods made with forced labor from entering their supply chains.

But the states' complaint alleges U.S. Trade Representative Jamieson Greer rushed investigations into 60 economies, bypassed required country-specific consultations and failed to explain why nearly uniform tariff rates were appropriate for economies with widely different policies.

"There is no rational fit between the purported problem of forced labor in international supply chains and the blanket global tariffs the USTR imposed," the complaint said.

The states argue Section 301 permits trade action only after an investigation of a specific country's unfair practices and requires any resulting tariffs to be tailored toward ending that conduct.

U.S. trade officials completed the 60 investigations in about two and a half months and grouped the economies into four tariff categories, with only 2.5 percentage points separating the two main rates.

The complaint also alleges the USTR identified no link between the rates and the prevalence of forced-labor-tainted goods in each economy. It also alleges trade representatives did not establish benchmarks countries could meet to have the duties lifted.

The filing points to exemptions the states say undermine the administration's rationale. USTR cited frozen beef from Brazil as one of three examples of goods connected to forced labor, but exempted the product from the tariffs.

New York Gov. Kathy Hochul said in a statement the tariffs are "a tax on hardworking families," saying they would drive up the costs of groceries, household essentials, building materials and other everyday goods.

The lawsuit also points to the timing of the tariffs. USTR announced them July 23, one day before temporary duties imposed under Section 122 of the Trade Act expired, allowing Trump's tariff regime to continue without interruption.

The Supreme Court had previously ruled that the International Emergency Economic Powers Act did not authorize Trump's earlier tariffs. The trade court later rejected the administration's use of Section 122, though that ruling has been paused during an appeal.

The states cite administration statements as evidence that the Section 301 outcome was predetermined. After the Supreme Court ruling, Greer said officials would use alternative trade authorities on an accelerated schedule to "ensure continuity." Treasury Secretary Scott Bessent later said tariff rates would return to "exactly where they were," according to the complaint.