'Pay people back': More than 20 states sue Trump admin over 'illegal tariffs' after court setback

The lawsuit said the Trump administration exceeded its authority by imposing new tariffs after the Supreme Court struck down an earlier tariff program
President Donald Trump holds up a copy of a 2025 National Trade Estimate Report as he speaks during a 'Make America Wealthy Again' trade announcement event in the Rose Garden at the White House on April 2, 2025 in Washington, DC (Getty Images)
President Donald Trump holds up a copy of a 2025 National Trade Estimate Report as he speaks during a 'Make America Wealthy Again' trade announcement event in the Rose Garden at the White House on April 2, 2025 in Washington, DC (Getty Images)

WASHINGTON, DC: More than 20 US states filed a lawsuit on Thursday, March 5, challenging new global tariffs imposed by President Donald Trump, arguing the administration was overstepping its legal authority after a recent defeat at the US Supreme Court.

The lawsuit targets Trump’s decision to impose tariffs of up to 15% on a wide range of imported goods from around the world. The new duties were introduced under Section 122 of the Trade Act of 1974, a provision that has never previously been used by a US president.

Democratic attorneys general and governors behind the suit argue that the administration is attempting to sidestep the court’s ruling by relying on a different legal authority to pursue essentially the same trade policy.

Gavin Newsom, the governor of California, watches as U.S. President Donald Trump gives a speech at the World Economic Forum (WEF) on January 21, 2026 in Davos, Switzerland. The annual meeting of political and business leaders comes amid rising tensions between the United States and Europe over a range of issues, including Trump's vow to acquire Greenland, a semi-autonomous Danish territory. (Photo by Chip Somodevilla/Getty Images)
Gavin Newsom, the governor of California, watches as President Donald Trump gives a speech at the World Economic Forum (WEF) on January 21, 2026, in Davos, Switzerland (Chip Somodevilla/Getty Images)

Lawsuit against Trump tariffs led by four key states

The legal challenge is being spearheaded by attorneys general from Oregon, Arizona, California and New York.

Officials from these states say that the tariffs could increase costs for governments, businesses, and consumers while creating economic uncertainty.

“The focus right now should be on paying people back, not doubling down on illegal tariffs,” said Dan Rayfield, the attorney general of Oregon.

The lawsuit comes just one day after a federal judge ruled that companies that had paid tariffs under Trump’s previous framework were entitled to refunds following the Supreme Court’s decision striking down those earlier duties.

US President Donald Trump speaks during the 74th annual National Prayer Breakfast at the Washington Hilton on February 5, 2026 in Washington, DC. President Trump is joined by bipartisan Congressional members, business, and religious leaders to pray for the nation. (Photo by Alex Wong/Getty Images)
President Donald Trump speaks during the 74th annual National Prayer Breakfast at the Washington Hilton on February 5, 2026, in Washington, DC (Alex Wong/Getty Images)

Tariffs imposed after Supreme Court ruling

Trump introduced the new tariffs after the Supreme Court rejected a separate tariff program he had enacted last year under the International Emergency Economic Powers Act.

That law allows the president to regulate economic activity during national emergencies, but the court ruled that the administration had overstepped its authority in using it to impose sweeping tariffs on imports.

WASHINGTON, DC - FEBRUARY 05: Treasury Secretary Scott Bessent testifies before the Senate Committee on Banking, Housing, and Urban Affairs in the Dirksen Senate Office Building on February 05, 2026 in Washington, DC. The Committee met to hear testimony on the Financial Stability Oversight Council’s Annual Report to Congress. (Photo by Kevin Dietsch/Getty Images)
Treasury Secretary Scott Bessent testifies before the Senate Committee on Banking, Housing, and Urban Affairs in the Dirksen Senate Office Building on February 05, 2026, in Washington, DC (Kevin Dietsch/Getty Images)

Within four days of the ruling on February 20, Trump shifted to Section 122 of the Trade Act of 1974, initially imposing 10% tariffs on foreign goods.

Scott Bessent, the US Treasury secretary, said in an interview with CNBC on Wednesday that the administration planned to increase those tariffs to the 15% maximum allowed under the law.

Trump has argued that the tariffs are necessary to address long-standing US trade deficits and to rebalance global trade relationships.

DALLAS, TEXAS - FEBRUARY 20: U.S. Treasury Secretary Scott Bessent speaks at the Economic Club Of Dallas on February 20, 2026 in Dallas, Texas. The Treasury Secretary spoke about the economy and the Supreme Court's 6-3 ruling on a decision against President Donald Trump’s tariffs (Photo by Richard Rodriguez/Getty Images)
Treasury Secretary Scott Bessent speaks at the Economic Club of Dallas on February 20, 2026, in Dallas, Texas (Richard Rodriguez/Getty Images)

Section 122 permits the president to impose tariffs of up to 15% if the United States faces serious balance-of-payments problems or other international financial disruptions. However, the tariffs can remain in place for only five months unless Congress votes to extend them.

The states’ lawsuit argues that the provision was designed for narrow economic crises, not for broad trade actions aimed at reducing trade deficits.

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