California Joins Multistate Lawsuit to Block Trump’s New Global Tariffs

California and 23 other states sued President Donald Trump on Thursday over his latest tariffs, arguing the administration is using an obscure law to bypass the Supreme Court and create new costs for families.

“Last month, the Supreme Court struck down those tariffs as unlawful, rightfully so,” California Attorney General Rob Bonta said during a press conference announcing the lawsuit. “Today, we’re back for round two, because instead of accepting the ruling, the president doubled down.”

The lawsuit zeroes in on Section 122 of the Trade Act of 1974, which allows the president to impose temporary tariffs during specific economic emergencies.

Though the tariff is currently set to 10%, Treasury Secretary Scott Bessent confirmed this week that the rate will rise to 15% within days. The states are asking the U.S. Court of International Trade to declare the tariffs unlawful and refund money already collected, with interest.

Section 122 was enacted in 1974 to address a specific type of financial crisis tied to a fixed exchange rate system, during a time when currencies were tied to a set value like gold.

The U.S. abandoned that system just two years later in favor of today’s floating rate system, where currency values fluctuate freely on global markets.

“It is an archaic statute that was never intended for its current purpose as used by the Trump administration,” Oregon Attorney General Dan Rayfield said.

For California, the financial stakes of global trade policy are significant. The state is the fourth largest economy in the world, the nation’s largest importer and its second largest exporter. Previous International Emergency Economic Powers Act tariffs cost each American between roughly $1,000 and $2,000 over the course of a year, Bonta said — or an estimated $40 billion to $80 billion in costs to Californians alone.

The new Section 122 tariffs, if allowed to stand, are estimated to cost the average American household an additional $200 to $600 per year, he added.

“For the President of the United States, twice, to act unlawfully to raise prices after promising the American people he would lower prices, I think that tells you all you need to know,” Bonta said.

California’s economy has already shown signs of strain from the administration’s trade policy. Businesses in San Francisco’s Chinatown have struggled to stay afloat amid the trade war, and officials at the Port of Oakland warned that tariffs would stifle shipping demand at one of the West Coast’s busiest trade hubs.

California farmers, who depend heavily on export relationships with Canada and other trading partners, have also raised alarms about disruptions to long-standing trade ties.

The lawsuit also challenges Trump’s justification for invoking it. To use Section 122, a president must identify a “large and serious” balance-of-payments deficit — but the complaint argues Trump mischaracterized the term by focusing only on the nation’s goods trade deficit while ignoring a financial account surplus of roughly $1.13 trillion in 2024.

When all components are properly included, the lawsuit said, the actual U.S. balance of payments position amounted to approximately negative $53 billion, or about 0.2% of GDP.

“A trade deficit is not a balance of payment deficit,” Bonta said. “The president either doesn’t know the difference, or he doesn’t care.”

The lawsuit also marks the 60th time California has sued the White House since Trump took office.