California becomes first state to file lawsuit to end Trump's tariffs

The legal battle against Donald Trump is escalating with California becoming the first state to file a lawsuit challenging the president's use of emergency powers to enact broad-sweeping tariffs that have sparked an economically devastating global trade war.

On Monday, I wrote about Emily Ley, a small business owner from Pensacola, Fla., who courageously filed the first lawsuit challenging the legality of Trump's tariff policy. She was represented by the New Civil Liberties Alliance, a non-profit libertarian legal group.

Her lawsuit, filed in federal court in Florida in early April, claimed Trump's executive orders imposing steep tariffs on Chinese imports were unconstitutional. Ley, the founder and CEO of Simplified, which sells organizing planners and paper products designed for busy women, claimed that her business is being severely harmed by the tariffs.

On Monday, another non-profit libertarian legal group, the Liberty Justice Center, filed a lawsuit before the New York-based U.S. Court of International Trade broadly challenging the Trump administration’s authority to unilaterally issue the “Liberation Day” tariffs on April 2 against countries around the world, not just China. The LJC filed its lawsuit on behalf of five small businesses across the U.S.

On Wednesday, California Gov. Gavin Newsom and state Attorney General Rob Bonta announced that the state had filed a lawsuit in the U.S. District Court for the Northern District of California to end the tariffs.

In a news release, Newsom said:

“President Trump’s unlawful tariffs are wreaking chaos on California families, businesses, and our economy — driving up prices and threatening jobs. We’re standing up for American families who can’t afford to let the chaos continue.”

And Bonta added:

"The President’s chaotic and haphazard implementation of tariffs is not only deeply troubling, it’s illegal. As the fifth largest economy in the world, California understands global trade policy is not just a game. Californians are bracing for fallout from the impact of the President’s choices — from farmers in the Central Valley, to small businesses in Sacramento, and worried families at the kitchen table — this game the President is playing has very real consequences for Californians across our state. I am proud to go to bat alongside Governor Newsom to fight for California’s vibrant economy, businesses, and residents.”

All three of the tariff-related lawsuits basically make the same legal argument.

The lawsuits argue that Trump's use of the 1977 International Economic Emergency Powers Act (IEPPA), is unlawful and unprecedented. They claim that the IEEPA authorizes such emergency actions as imposing economic sanctions or freezing assets, but doesn't authorize the president to impose tariffs. Tue lawsuits note that this is the first time in the IEEPA's nearly 50-year history that a president a president has attempted to use this law to impose tariffs.

As in the other lawsuits, California's complaint invokes the U.S. Supreme Court's major questions doctrine, which holds that in matters of vast economic and political significance, federal agencies and the executive must have clear and specific authorization from Congress. Article I of the U.S. Constitution grants Congress sole authority to control tariffs, which it does by passing detailed tariff statutes.

The news release from Newsom's office said:

In recent years, the Court has applied this standard to strike down major initiatives, including President Obama’s Clean Power Plan and President Biden’s student loan forgiveness program, ruling that novel executive actions with broad impacts on the national economy cannot rest on vague statutory authority. 

It is difficult to imagine a more economically significant set of actions than the one Trump is taking on tariffs, which have inflicted hundreds of billions of dollars in economic losses on a whim, using a statute that doesn’t mention tariffs. The Court, applying this doctrine even-handedly, will find that such expansive action absent congressional approval is a clear violation of the law. 

Newsom and Bonta held a news conference Wednesday at a Central Valley almond farm to announce the lawsuit.

The Associated Press reported:

Christine Gemperle, a second-generation almond farmer in the Central Valley, said her farm has survived three droughts and the COVID-19 pandemic over the decades, but she’s uncertain how to the family business would make it through the ongoing trade war. Farmers in California grow roughly 76% of the world’s almonds, and they rely on the global markets for materials to build farming equipment and irrigation systems.

“Will we be able to access what we need to grow our crops, and if so, will we even be able to afford it?” Gemperle said Wednesday.

Trump has been yo-yoing around with his tariff policy. As of Wednesday evening, according to The Los Angeles Times, the administration has kept in place a base 10% tariff on nearly all global imports. Previously announced tariffs on Mexico and Canada stand at 25% for most imports, with some exemptions. And Chinese imports face a huge 145% tariff.

Newsom emphasized that Mexico, Canada and China together account for 44% of the state's imports.

In his press release, Newsom said the lawsuit follows recent steps that the state has taken in an effort to blunt the negative impact from Trump's tariffs on California's economy. He has asked countries to exempt California exports from retaliatory tariffs and launched a tourism campaign to encourage Canadians to visit the state.

At the news conference, Newsom said:

“No state is poised to lose more than the state of California. So that's our state of mind and that's why we're asserting ourselves on behalf of 40 million Americans.

"And I imagine if you caucus these 40 million Americans, you'f find few – I don't care where they were in the last election – that are celebrating this uncertainty, that are celebrating the largest tax increase in modern U.S. history, in essence a sales tax."

(MSNBC's Lawrence O'Donnell had a lengthy segment Wednesday night on how Trump's tariff policy is unconstitutional beginning at the 8-minute mark and more specifically on California's lawsuit at the 14-minute mark).of