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MANHATTAN (CN) — Democratic attorneys general and governors from 23 states sued President Donald Trump to once again block the president’s tariffs, claiming he is relying on an archaic 1974 law that was not intended to address trade deficits.
In a 28-page complaint filed in the U.S. Court of International Trade on Thursday, the 21 attorneys general and two governors claim the president is unlawfully relying on the Trade Act of 1974 to impose illegal tariffs for political ends.
In a televised press conference, Oregon Attorney General Dan Rayfield said Trump is relying on an “archaic law” from when the country was still on the gold standard that has never before been used. Rayfield said Trump could have used Congress to pass tariffs, but “the truth is he doesn’t have the support of Congress and he doesn’t have the support of the American people.”
Arizona Attorney General Kris Mayes said the 1974 law was intended only to handle balance-of-payment deficits and not as a bargaining chip to address large trade deficits. “The president either doesn’t know the difference, or he doesn’t care,” she said. “Either way, he is breaking the law again.”
Trade deficits refer only to imports versus exports, while a balance of payments between the United States and another country includes other economic transactions, such as financial transfers. An email seeking comment from the Department of Homeland Security, which was named in the suit, was not immediately returned.
Last month, the U.S. Supreme Court dealt a fatal blow to Trump’s tariff regime, ruling the president does not have emergency powers to levy unilateral tariffs under the International Emergency Economic Powers Act.
The 6-3 ruling elicited a furious rebuke from Trump, who then announced a new 10% global tariff with plans of soon upping it to a 15% global tariff.
On Wednesday, more bad tariff-related news hit Trump when Senior U.S. Judge Richard Eaton of the Court of International Trade ruled the administration must start paying $130 billion in tariff refunds to more than 2,000 affected companies.
In his three-page order, Eaton ordered U.S. Customs and Border Protection to liquidate any outstanding imports without considering IEEPA-related duties, as well as to re-liquidate any products for which liquidation is not yet final.
Goods that go through U.S. customs enter a “liquidation process,” during which importers have six months to contest any imposed duties on those goods.
To issue new tariffs, the Trump administration relied on Section 122 of the 1974 trade law, which was designed to address trade deficits. In the complaint, the plaintiffs say the Trump administration wrongfully cited a $1.2 trillion goods trade deficit last year due to a rounding error.
“Were the president to find the endless tariff authority he seeks based only on his decision to conflate trade deficits alone with balance of payment deficits, he would be seizing power from Congress unconstitutionally,” the plaintiffs state.
Attorney General Letitia James said she would welcome Republican attorneys general to join the complaint, adding that Trump is causing “more economic chaos” in imposing the new round of tariffs.
More than 1,000 companies have sued the U.S. government seeking refunds from tariffs imposed since President Trump’s “Liberation Day” last April. Since then, the administration has tinkered with the precise amount of tariffs imposed on specific countries, sometimes at the whim of the president over perceived political slights.
Trump officials consistently have said the cost of tariffs is borne by foreign countries, but businesses opposing the duties claim they will have heaped more than $3 trillion in additional taxes on Americans over the next decade.
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