WASHINGTON — Delaware is among 24 states that filed a federal lawsuit Thursday challenging President Donald Trump’s recently implemented global import duties, which were put in place following a major Supreme Court setback.
Democratic state attorneys general spearheading the legal challenge claim Trump is exceeding his executive authority with the proposed 15% import duties affecting much of the world.
The president has defended the tariffs as necessary tools to address America’s persistent trade deficits. Trump implemented the duties using Section 122 of the Trade Act of 1974 after the Supreme Court invalidated tariffs he had established last year through emergency powers legislation.
The previously unused Section 122 permits presidents to establish tariffs up to 15%, but limits them to five months without congressional approval.
Oregon, Arizona, California and New York attorneys general are spearheading the legal action.
The plaintiff states contend that Section 122 was designed for use only under specific, narrow conditions and doesn’t authorize Trump to establish broad-based import taxes. They also claim the tariffs will increase expenses for state governments, businesses and consumers.
Many of these same states previously won legal battles against Trump’s tariffs established under different legislation: the International Emergency Economic Powers Act (IEEPA).
Just four days after the Supreme Court invalidated his comprehensive IEEPA tariffs on February 20, Trump utilized Section 122 to establish 10% duties on international goods. Treasury Secretary Scott Bessant announced to CNBC on Wednesday that the administration would increase the rates to the maximum 15% this week.
Democratic states and other opponents argue the president cannot utilize Section 122 as a substitute for the invalidated tariffs to address trade deficit issues.
The Section 122 provision targets what it describes as “fundamental international payments problems.” The central question is whether this language encompasses trade deficits — the difference between U.S. exports and imports.
Section 122 emerged from financial crises during the 1960s and 1970s when the U.S. dollar was backed by gold. Foreign nations were exchanging dollars for gold at fixed rates, threatening currency collapse and market instability. Since the dollar is no longer gold-backed, opponents argue Section 122 is outdated.
In an embarrassing development for Trump, his Justice Department argued in court documents last year that the president needed emergency powers because Section 122 had “not have any obvious application” for addressing trade deficits, calling them “conceptually distinct” from balance-of-payment concerns.
However, some legal experts believe the Trump administration has stronger legal ground this time.
“The legal reality is that courts will likely provide President Trump substantially more deference regarding Section 122 than they did to his previous tariffs under IEEPA,” Peter Harrell, visiting scholar at Georgetown University’s Institute of International Economic Law, wrote in a Wednesday analysis.
The specialized Court of International Trade in New York, which will consider the states’ lawsuit, ruled last year when striking down the emergency-powers tariffs that Trump didn’t require them since Section 122 was available for combating trade deficits.
Companies that paid duties under that legislation achieved a court victory Wednesday when a judge determined refunds are warranted.
Trump possesses additional legal mechanisms for implementing tariffs, with some already surviving judicial scrutiny. Duties Trump established on Chinese imports during his initial presidency under Section 301 of the same 1974 trade legislation remain active.
The lawsuit also includes attorneys general from Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Rhode Island, Vermont, Virginia, Washington, Wisconsin, plus the governors of Kentucky and Pennsylvania.
