The tariff fight is back in federal court, and this time 25 Democratic-led states are asking judges to block President Donald Trump’s newest import taxes before they become another expensive rerun for businesses and shoppers. The challenge reaches straight into California’s supply chain, where containers arriving through Southern California ports can quickly become costs on store shelves, factory floors and state purchasing budgets.
New York Attorney General Letitia James said the states sued the Trump administration Monday, arguing the new duties exceed the president’s legal authority to tax imports. The coalition is targeting tariffs that cover goods from 60 trading partners, according to Reuters, which reported the case from New York.
The New Tariffs Target Goods From 60 Economies
The White House says the latest tariff program was created under Section 301 of the Trade Act of 1974, after an investigation into whether foreign governments failed to effectively prohibit imports made with forced labor. The administration’s official memorandum sets duties at 10% for some economies and 12.5% for others, with product-specific exemptions.
The states argue that the forced-labor rationale does not give the president a blank check to impose sweeping import taxes. The White House memorandum says the duties are intended to pressure trading partners to change those policies.
This Is The Latest Round In A Fast-Moving Tariff War
The legal backdrop is a February 20 Supreme Court ruling that said the International Emergency Economic Powers Act does not authorize the president to impose tariffs, according to the Supreme Court opinion. Earlier this year, James led a separate 24-state challenge to Trump’s Section 122 tariffs, the New York attorney general said at the time.
That earlier fight left importers, retailers and state agencies sorting through refund claims and shifting tariff rules. Hoodline previously tracked the refund battle that followed the Supreme Court decision.
Southern California Ports Sit In The Middle Of The Dispute
The local stakes are especially visible at the ports of Los Angeles and Long Beach, where imported goods enter a vast network of warehouses, manufacturers, retailers and freight companies. The Port of Los Angeles said it moved 1,002,734 twenty-foot-equivalent units in June, its busiest June ever, as businesses adjusted shipments around changing trade policy and supply-chain uncertainty.
That kind of cargo volume makes tariff policy more than a Washington argument. When duties change suddenly, importers can face higher costs after orders are placed and cargo is already moving across the Pacific, leaving businesses to decide whether to absorb the hit, raise prices or delay shipments.
Small Businesses Are Challenging The Same Strategy
The states are not the only plaintiffs testing the administration’s latest tariff theory. Two small businesses filed a parallel challenge in July, arguing that the government needed more detailed, country-specific findings to justify duties tied to alleged failures to stop forced-labor imports, Axios reported.
The White House has defended Section 301 as a legally durable trade tool and says the tariffs are aimed at foreign governments’ failure to block forced-labor goods. That gives the administration a clear answer to the states’ lawsuit: this time, officials say, they are using a trade statute specifically designed to address unfair practices rather than emergency powers.
What Happens Next In Trade Court
The new lawsuit does not automatically erase the tariffs, so importers and businesses remain stuck planning around duties that could be changed or challenged again. The Court of International Trade will now have to weigh whether the administration’s country-by-country findings and tariff structure fit within the authority Congress granted under Section 301.
If the states prevail, the decision could disrupt another major piece of Trump’s tariff agenda and trigger a new round of refund and compliance disputes. For California’s ports and the businesses tied to them, the case is another reminder that the price of a container can hinge on a legal argument thousands of miles away.
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