President Trump discusses tariffs as Secretary of Commerce Howard Lutnick looks on. (Photo: White House)
Donald Trump is being challenged again in court over his latest tariffs, after the Supreme Court, in a stunning defeat, ruled more than $100 billion in levies were illegal.
New York Attorney General Letitia James and a coalition of 21 other state attorneys general and the governors of Kentucky and Pennsylvania are leading the latest assault after their successful legal challenge before the high court last month.
The Court ruled 6-3 that Trump tariffs imposed under the International Emergency Economic Powers Act (IEEPA), were illegal. The court has paved the way for billions of dollars in refunds.
Trump quickly followed the ruling with new tariffs on a range of countries and goods using a separate measure, Section 122 of the Trade Act of 1974.
The long history of U.S. tariffs.
James and the coalition argue the new tariffs are equally illegal because the president does not have the power to impose them under the act.
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“Once again, President Trump is ignoring the law and the Constitution to effectively raise taxes on consumers and small businesses,” said James in a release. “The president is causing more economic chaos and expecting Americans to foot the bill.”
The Trump administration tariffs, raised an estimated $264 billion in 2025, up from $79 billion in 2024, according to conservative Tax Foundation.
TheKiel Institute for the World Economy analyzed 25 million shipments and found that 96% of costs were paid by Americans, averaging $1,000 to $1,300 per U.S. household in 2025.
The latest Section 122 tariffs, which are projected to raise $36 billion, violate the Constitution’s protection of the separation of powers.
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The suit seeks a court order declaring the tariffs illegal and compelling the government to issue refunds.
“After the Supreme Court rejected his first attempt to impose sweeping tariffs, the president is causing more economic chaos and expecting Americans to foot the bill,” James said.
New York Gov. Kathy Hochul said the administration’s ” illegal and reckless tariff policies continue to weigh on the businesses, farmers, and consumers across New York State, hindering the state’s overall economy.”
She estimates New Yorkers are owed $13.5 billion.
The lawsuit notes that no president has ever attempted to impose tariffs using Section 122.
The law is specifically designed to allow limited tariffs to address certain monetary crises, including a significant “balance of payments” deficit – a distinct economic problem.
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The measure had application when the United States had a fixed-rate monetary exchange system based on gold. President Nixon decoupled the dollar from gold in the 1970s, eliminating the problem.
“The president’s primary rationale for imposing these tariffs – the country’s trade deficit – is not a legitimate reason for imposing tariffs under Section 122,” the coalition argues.
“In fact, the administration admitted during the lawsuit against the president’s IEEPA tariffs that trade deficits ‘are conceptually distinct from balance of payments deficits.'”
Trump’s tariffs also fail to meet technical requirements spelled out in the act.
Chief among them exceptions for many goods from Canada, Mexico, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. They also include 84 pages of specific product exceptions.
“The president’s use of Section 122 is a clear attempt to escape the Supreme Court’s ruling in the case against the tariffs imposed under IEEPA,” James said.
Under the Constitution, Article I clearly gives Congress the power to tax and impose tariffs, and the president does not have the power to impose these kinds of sweeping tariff increases without congressional approval.
Joining Attorney General James in filing this lawsuit are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Rhode Island, Oregon, Vermont, Virginia, Washington, Wisconsin, and the governors of Kentucky and Pennsylvania.