California Sues Trump Over His Unlawful Use of Tariffs — Again

OAKLAND — California Attorney General Rob Bonta and Governor Gavin Newsom today, along with a coalition of 22 attorneys general and the states of Kentucky and Pennsylvania, announced a new lawsuit challenging President Trump’s imposition of global tariffs using Section 122 of the Trade Act of 1974. The lawsuit, to be filed today in the Court of International Trade, argues that the President’s use of Section 122 to impose tariffs is illegal because the President’s justifications for its use do not fall within the limited circumstances required by the statute. Attorney General Bonta and Governor Newsom previously challenged the President’s imposition of tariffs under the International Emergency Economic Powers Act of 1977 (IEEPA). And last month, the U.S. Supreme Court struck down President Trump’s imposition of tariffs under IEEPA, declaring them illegal.

“American consumers and business owners have made it clear they do not want tariffs, yet President Trump has tried over and over again to implement them. This time, the President is attempting to use an obscure law as a tool for his tariffs, and is yet again, going about it illegally,” said Attorney General Bonta. “This is not new terrain for California, but it is exasperating. Why is President Trump — who ran on the promise of making life more affordable for families — breaking the law to raise the cost of living for Americans? California has challenged the illegal imposition of tariffs time and time again because this question matters enormously for Californians who are already struggling with rising costs. For the 60th time since he took office, we’ll see the President in court."  

“These tariffs are nothing more than a tax on working families — shifting the burden of Trump’s failed trade negotiations onto folks who are already struggling to make ends meet. Trump keeps throwing out illegal, reckless policies, hoping something sticks, while everyday Americans pay the price," said Governor Gavin Newsom. "Trump’s tariffs were overturned by the Supreme Court, so now he’s inflicting new tariffs on Californians and all Americans like a toddler throwing a temper tantrum. Chaos is not leadership. And we deserve better.” 

BACKGROUND 

The President’s regime of unlawful tariffs has made the affordability crisis worse for millions of Americans and has sent shockwaves through financial markets, businesses, and consumers in every corner of the globe — including in California, which is the fourth-largest economy in the world and the country’s largest importer and second-largest exporter among the 50 states. A recent Yale report found that the tariffs led to the average family losing $1,751 dollars last year. 

On February 20, 2026, the Supreme Court ruled that the tariffs President Trump imposed under IEEPA were unlawful. That same day, the President issued a proclamation claiming authority under Section 122 of the Trade Act of 1974 to impose a 10% tariff on most products and countries worldwide. The next day, President Trump announced he would be raising these these tariffs to 15%. Tariffs under this statute cannot exceed 15% and are limited to 150 days, after which the President must seek congressional approval.

Section 122 Tariffs 

Section 122 authorizes the President to impose tariffs under a very specific set of circumstances, namely when fundamental international payments problems require special import measures to restrict imports. Section 122 tariffs are allowed only when such fundamental payment problems require special measures under three conditions: (1) to deal with large and serious balance-of-payments deficits, (2) to prevent an imminent and significant depreciation of the dollar, or (3) to cooperate with other countries in correcting international financial disequilibrium. 

President Trump justifies invoking Section 122 on four grounds including (1) ongoing trade deficits, (2) negative primary income balance, (3) decline in the net international-investment position of the United States, and (4) persistent deficit of the balance on secondary income. Not a single one of the four justifications offered by the President are circumstances where Section 122 tariffs would be legal and appropriate.

Additionally, Section 122 requires tariffs be applied in a nondiscriminatory manner among countries and uniformly across products. Because the Proclamation exempts many goods from Canada, Mexico, Costa Rica, and other countries, it violates the Section 122 requirement that the tariffs be applied consistently with the principle of nondiscriminatory treatment. Because the Proclamation also includes 84 pages of product exceptions, it also violates the requirement that the tariffs be applied uniformly across products. The lawsuit also includes a claim against U.S. Customs and Border Protection arguing that the agency guidance announcing its implementation of the President’s Proclamation is illegal under the Administrative Procedure Act (APA).

The case is led by California Attorney General Rob Bonta, Oregon Attorney General Dan Rayfield, Arizona Attorney General Kris Mayes, and New York Attorney General Letitia James. Also joining the lawsuit are the attorneys general of Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Rhode Island, Vermont, Virginia, Washington, Wisconsin, and the Governors of Kentucky and Pennsylvania. 

California has worked to challenge the President’s illegal tariffs on all fronts. Last year, Attorney General Bonta and Governor Newsom filed a lawsuit challenging President Trump’s unlawful use of power to impose tariffs without the consent of Congress. Attorney General Bonta has filed an amicus brief in the Court of International Trade in Oregon v. Trump as well as in the D.C. Circuit in Learning Resources, Inc. v. Trump, cases challenging President Trump’s illegal imposition of tariffs, and filed an amicus brief in the U.S. Supreme Court in Learning Resources Inc. v. Trump. In addition, he has hosted roundtable discussions in San Francisco and Los Angeles with business leaders on the front lines of the tariff war to discuss the impacts of tariffs on industries across California.