Protecting the World’s 5th Largest Economy: Attorney General Bonta, Governor Newsom Sue Trump Administration Over Unlawful Imposition of Tariffs

Tariffs threaten California’s economy, people, small businesses 

STANISLAUS COUNTY — California Attorney General Rob Bonta and Governor Gavin Newsom today filed a lawsuit challenging President Trump’s unlawful use of power to impose tariffs and direct the Department of Homeland Security (DHS) and Customs and Border Patrol (CPB) to implement and enforce those tariffs without the consent of Congress. Since early February, the Trump Administration has issued over a dozen executive orders under the International Emergency Economic Powers Act of 1977 (IEEPA) to impose tariffs that have sent shockwaves through financial markets, businesses, and consumers in every corner of the globe. In the lawsuit today, Attorney General Bonta and Governor Newsom challenge the President’s use of the IEEPA to levy those tariffs, arguing that the IEEPA does not authorize the President to impose these tariffs. The emergency tariffs challenged under the lawsuit are projected to, at a minimum, shrink the U.S. economy by $100 billion annually, increase inflation by 1.3%, and cost the average American family $2,100. The economic impact of the President’s unlawful tariffs could have resounding impacts on California’s economy, budget, and consumers. California is a significant and frequent purchaser of goods impacted by the tariffs and the projected increase in cost to the state is significant. 

“The President’s chaotic and haphazard implementation of tariffs is not only deeply troubling, it’s illegal. As the fifth largest economy in the world, California understands global trade policy is not just a game,” said Attorney General Rob Bonta. “Californians are bracing for fallout from the impact of the President’s choices — from farmers in the Central Valley, to small businesses in Sacramento, and worried families at the kitchen table — this game the President is playing has very real consequences for Californians across our state. I am proud to go to bat alongside Governor Newsom to fight for California’s vibrant economy, businesses, and residents.” 

“President Trump’s unlawful tariffs are wreaking chaos on California families, businesses, and our economy — driving up prices and threatening jobs," said Governor Gavin Newsom."We’re standing up for American families who can’t afford to let the chaos continue.”

California is the nation’s largest importer and second-largest exporter. The President’s tariffs will impact California’s businesses, including its ports and small businesses that rely on trade. California’s agricultural sector, which exports goods around the world, will also face particularized challenges as other countries impose retaliatory tariffs and decrease trade in response to President Trump’s tariffs. Furthermore, the tariffs directly harm California’s ability to contract, purchase, and sell goods. These effects are already too real: vendors who contract with California have indicated that they will pass their increased costs from President Trump’s tariffs on to the state directly.  

Claiming authority under the IEEPA, President Trump has issued multiple executive orders to impose, pause, re-start, and modify 25% tariffs on Mexico and Canada and a universal 10% tariff on every other U.S. trading partner. Separately and in addition, the President’s actions have goaded China into a full-blown trade war, with tariffs reaching 145% on Chinese goods, and China imposing reciprocal 125% tariffs on U.S. goods. Additionally, President Trump has imposed individualized reciprocal tariffs of up to 50% on nearly 90 specific countries; they are currently paused for 90 days before going into effect. Once the 90-day “pause” expires, the harms will only compound further. And new tariffs are being contemplated or announced nearly every day. 

To justify his tariffs, the President has declared national emergencies and extended prior declared emergencies beyond the bounds of reason. But with or without emergencies, the President does not have the power to levy tariffs under the IEEPA.   

The impacts of President Trump’s dizzying array of tariff plans have already wreaked havoc on our financial systems: the U.S. stock market suffered the largest two-day loss in its history in the two days following the announcement of President Trump’s most sweeping tariffs. These actions and the near-daily threats to impose new tariffs have already inflicted and continue to inflict serious financial harms on California. 

The complaint filed today alleges that the Constitution expressly gives the authority to impose tariffs to Congress, not the President, and the IEEPA does not provide the required congressional authorization for President Trump to impose tariffs — Congress enacted the IEEPA to limit Presidential authority and to prevent Presidential abuse of power — not to give the President these powers. The complaint asks the court to declare that tariff orders made under the purported authority of the IEEPA are unlawful and void and to halt DHS and CPB from implementing and enforcing these orders.  

A copy of the complaint is available here.