California First State To Sue President Over ‘Liberation Day’ Duties

Topline

The California government will file a lawsuit Wednesday challenging President Donald Trump’s sweeping tariffs on foreign imports, multiple outlets report, becoming the first state to mount a legal challenge against the tariffs as Gov. Gavin Newsom’s administration argues Trump doesn’t have the authority to impose them.

California Gov. Gavin Newsom at the Chateau Marmont on March 26 in West Hollywood.

Variety via Getty Images

Key Facts

Newsom and California Attorney General Rob Bonta will file a lawsuit Wednesday in federal district court in California, multiple outlets report, which will allege Trump has unlawfully imposed tariffs that pose an “immediate and irreparable harm” to the state’s economy.

The economic fallout from Trump’s tariffs pose “near-daily” threats to Californians, Bonta said in a statement, arguing, “The President’s chaotic and haphazard implementation of tariffs is not only deeply troubling, it’s illegal.”

The lawsuit is the first legal challenge a state has brought against Trump’s sweeping tariffs, as the president has imposed a baseline 10% tax on most foreign goods—but paused even higher rates for most countries—plus tariffs of at least 145% on many Chinese goods and separate tariffs on some imports from Canada and Mexico.

California argues Trump does not have authority to impose the tariffs under the International Emergency Economic Powers Act (IEEPA), the law Trump has cited in his executive orders imposing tariffs, as that law allows presidents to impose some economic sanctions during national emergencies, but does not say anything about tariffs.

The litigation is the third major lawsuit against Trump’s tariffs—which all argue he violated the IEEPA—following a suit filed Monday by the Liberty Justice Center and small businesses ,and federal litigation in Florida that challenges Trump’s previous executive orders imposing tariffs on China.

The White House has not yet responded to a request for comment on the lawsuit.

What To Watch For

The lawsuit is expected to be filed Wednesday morning in California’s northern district. It’s unclear how long the litigation will take to play out or when there could be a ruling over whether to halt Trump’s tariffs. California will ask the court to have the tariffs declared unlawful and bar federal agents from enforcing them, according to The New York Times.

Surprising Fact

California is the fifth-largest economy in the world, behind only the U.S., China, Germany and Japan. It’s also biggest importer of any U.S. state, the Times notes, and the second-largest exporter.

What Is The International Emergency Economic Powers Act?

The IEEPA gives presidents power to take major economic steps and impose sanctions during national emergencies, which the law defines as an “unusual and extraordinary threat” to the U.S. Presidents can “investigate, regulate or prohibit” foreign transactions, trade of currency and securities, and payments or credits that involve the foreign countries posing a threat, the law states. It does not, however, explicitly say anything about tariffs, leading California and other plaintiffs to argue Trump can’t use the law to impose them. The IEEPA was first enacted in 1977 and has historically been used by presidents to implement a variety of economic sanctions, with the Congressional Research Service noting presidents had invoked the law 69 times as of 2024. While most uses of the IEEPA target specific countries, it’s not unprecedented for presidents to use the law to declare broader national emergencies that warrant sanctions, such as President George W. Bush invoking the law against “persons who commit, threaten to commit, or support terrorism.” Groups suing Trump over his tariffs argue there’s no emergency that justifies using the law to apply sweeping tariffs on nearly all countries, however, with the Liberty Justice Center arguing in its lawsuit that any national emergency “is a figment of [Trump’s] own imagination,” as “trade deficits, which have persisted for decades without causing economic harm, are not an emergency” or an “unusual or extraordinary threat.”

Key Background

Trump imposed sweeping tariffs on imports from nearly all countries—even uninhabited ones—on April 2, which came on top of tariffs he previously imposed on Mexico, Canada and China. The tariff rates initially were as high as 50% for some nations, but Trump ultimately paused the worst of the tariffs hours after they took effect April 9, keeping a baseline 10% rate in place—and raising tariffs on China—while his administration seeks to negotiate trade deals with countries hoping to lower their tariff rates. Trump’s tariffs fulfill a longtime campaign promise by the president, despite warnings from economists that the sweeping tariffs will raise prices for U.S. consumers and harm the economy. The April 2 tariffs caused chaos in the global markets and led many economic experts to warn of a looming recession, and while markets rallied after Trump announced his 90-day pause, the 10% tariffs and skyrocketing rates on Chinese goods have still continued the economic uncertainty.