12 States Take Trump to Court: The Battle Against 'Liberation Day' Tariffs Intensifies

The Legal Showdown: 12 States Challenge Trump's Tariff Authority

In a significant legal confrontation that could reshape presidential trade powers, twelve U.S. states have asked a federal court to halt President Donald Trump's controversial 'Liberation Day' tariffs. The case, heard on Wednesday, May 21, 2025, by a three-judge panel at the Court of International Trade in Manhattan, represents one of the most substantial challenges to Trump's expansive use of executive authority in trade policy.

The coalition of states, led by Democratic attorneys general from New York, Oregon, and other states, contends that Trump has grossly overstepped his constitutional bounds by declaring a national emergency to impose sweeping taxes on imports from nations that sell more to the United States than they buy. At the heart of their argument is the claim that the president is seeking a 'blank check' to manage trade 'at his discretion' without proper congressional oversight or approval.

Oregon Attorney General Dan Rayfield, a prominent figure in the lawsuit, has been particularly vocal about the economic impact of these tariffs, estimating they will impose an additional $3,800 burden on the average household annually. 'President Trump enacted these tariffs without Congressional approval, public consultation, or limitations – and asserts that his decisions are immune to judicial review,' Rayfield stated. 'This is an abuse of emergency powers.'

Understanding Trump's Tariff Strategy

Trump's tariff policy has evolved in several waves since early 2025. In February, he imposed significant tariffs on China, Mexico, and Canada, citing concerns about immigration and drug trafficking. By April, he expanded his approach with a 10% blanket tariff on all imports, branded as 'Liberation Day' tariffs, with elevated rates for countries with which the U.S. has significant trade deficits, particularly China.

The president has justified these measures by characterizing the longstanding U.S. trade deficit as a national emergency that threatens American manufacturers and economic security. This framing is crucial to his legal justification, as it allows him to invoke the International Emergency Economic Powers Act (IEEPA), a 1977 law designed to address 'unusual and extraordinary' threats to the nation.

However, many of these targeted tariffs were suspended a week after their implementation, and the Trump administration recently reduced some of the most severe tariffs on China while negotiating a long-term trade agreement. This fluctuating approach has created significant market uncertainty and has become a focal point in the legal challenges.

The Constitutional Question: Presidential Power vs. Congressional Authority

The legal battle centers on a fundamental constitutional question: Does the president have the authority to unilaterally impose sweeping tariffs without explicit congressional approval?

According to the U.S. Constitution, the power to 'lay and collect Taxes, Duties, Imposts and Excises' belongs to Congress, not the president. Over time, Congress has enacted laws that grant the president some tariff authority under specific circumstances, but the states argue that Trump has significantly misinterpreted the International Emergency Economic Powers Act to validate his tariffs.

The IEEPA enables the president to wield various economic powers during a national emergency, including regulating or prohibiting imports, although it does not specifically mention tariffs. The plaintiffs assert that the 'national emergency' Trump cited – essentially the trade deficit that has existed for decades – is simply 'a figment of his own imagination' and does not constitute the type of 'unusual and extraordinary threat' required by the law.

Legal Arguments and Conservative Doctrines

Interestingly, the legal challenges draw on two doctrines that Republican-appointed judges have developed and embraced in recent years – both of which could weigh against the Trump administration's position.

The 'nondelegation doctrine' championed by conservatives holds that Congress cannot delegate its lawmaking powers to other bodies, including the executive branch. Five Republican appointees on the Supreme Court have signaled interest in deploying this theory more aggressively, which in this case would suggest that Trump's use of tariffs is unconstitutional.

Additionally, the 'major questions doctrine' has been used by conservative justices to nullify executive actions that exceed an undefined threshold of 'economic and political significance.' In those situations, there must be a clear delegation of authority from Congress – which the states argue does not exist for these tariffs.

The Justice Department has countered by arguing that the lawsuit should be dismissed, claiming the states have only presented 'speculative economic losses' rather than specific damages. They also contend that only Congress has the authority to contest a national emergency declared by the president under the IEEPA, not individual states or the judiciary.

Economic Impact and Corporate Response

The economic implications of Trump's tariff policies have been substantial. A model from Yale University estimates that they will increase inflation, result in nearly 800,000 lost jobs, and shrink the American economy by approximately $180 billion annually.

Major retailers like Walmart have begun to speak out about the impact on consumers. After initially downplaying the potential effects, Walmart changed its stance in May, warning that increased tariffs would likely lead to higher prices. 'We're encouraged by the advancements by the [Trump] administration on tariffs from the levels introduced in early April, but they remain excessively high,' CFO John David Rainey stated in a CNBC interview.

This more forthright response from Walmart underscores a growing willingness among corporate executives to openly challenge Trump's policy stances, despite the risks of public criticism from the president. Indeed, Trump responded to Walmart on social media, instructing the company to 'EAT THE TARIFFS' rather than pass costs on to consumers.

From April 10 to April 25, there were 139 corporate responses concerning tariffs across various channels, including press releases, earnings calls, social media, media interviews, and employee memos – a significant increase from earlier periods.

The Broader Legal Landscape

The states' lawsuit is one of at least seven legal challenges to Trump's tariff strategies. California has initiated a separate lawsuit in federal court in San Francisco, while other legal actions have been undertaken by businesses, advocacy groups, and members of the Blackfeet Nation.

Last week, the same three-judge panel heard arguments in a related case filed by five small businesses, and a ruling is anticipated in the upcoming weeks. These cases are being heard in the Court of International Trade, which specifically deals with civil lawsuits involving international trade.

Decisions from this court can be appealed to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., and ultimately to the Supreme Court, where the legal challenges to Trump's tariffs are widely expected to end up.

As these cases proceed, they will likely shape not just the immediate economic landscape but also the long-term balance of power between the executive and legislative branches in setting trade policy. The outcome could significantly constrain – or affirm – presidential authority to unilaterally impose tariffs, with far-reaching implications for international trade relations and domestic economic policy.