12 States Sue Trump Over 'Illegal Tax Hikes' from Tariffs

In a sweeping legal challenge, twelve U.S. states have jointly filed a lawsuit against the Trump administration, alleging that the former president unlawfully imposed tariffs that effectively act as tax hikes on American consumers and businesses. The lawsuit, led by New York Attorney General Letitia James and filed in the United States Court of International Trade, seeks to block further tariff enforcement and roll back those already in place.

The Core of the Case: Misuse of Emergency Powers

At the heart of the lawsuit is the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA)—a statute typically reserved for imposing sanctions during national crises—to justify sweeping tariffs on foreign goods. These tariffs, opponents argue, have driven up prices across industries and strained state economies already battling inflation and rising living costs.

“In the nearly five decades since IEEPA was enacted, no other president has used it to justify tariffs,” the lawsuit claims. “Congress never intended it to be used this way.” The filing argues that President Trump’s use of IEEPA to impose economic restrictions against long-standing trade partners under the guise of a “national emergency” sets a dangerous precedent and circumvents constitutional checks and balances.

The 12 states involved—New York, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, Oregon, and Vermont—are seeking immediate judicial intervention to halt the tariffs and block any further moves under IEEPA that resemble trade policy rather than emergency national security measures.

The Stakes for States—and Consumers

The lawsuit highlights how these tariffs, initially presented as a strategy to protect American jobs and manufacturing, have instead worsened inflation and increased the cost of living for average Americans. Industries reliant on imported components—ranging from construction to consumer electronics—have seen prices skyrocket, costs that are then passed on to consumers.

“Donald Trump promised that he would lower prices and ease the cost of living, but these illegal tariffs will have the exact opposite effect on American families,” said New York Attorney General Letitia James in a statement. “His tariffs are unlawful and if not stopped, they will lead to more inflation, unemployment, and economic damage.”

The lawsuit also contends that these tariffs are driving instability in state-level economic planning, leading to lost business opportunities and increased strain on state-funded programs.

White House Pushback: Framing It as National Defense

In response to the mounting legal challenges, Trump administration spokespersons have doubled down on their justification. Kush Desai, a White House spokesperson, called the lawsuits a “witch hunt” and insisted the administration is acting within its legal rights.

Desai said the tariffs are necessary to address two “national emergencies”—illegal immigration and the surge of fentanyl entering through the southern border—as well as a “ballooning U.S. trade deficit,” which the administration argues is a threat to economic security.

White House spokesperson Harrison Fields previously stated that the trade deficit constitutes a legitimate national emergency under the IEEPA framework, echoing the administration’s broader view that economic threats warrant urgent and unilateral action.

Legal Momentum Building Against Tariffs

This isn’t the first legal challenge Trump’s tariff strategy has faced. Earlier this month, the New Civil Liberties Alliance (NCLA), a civil rights group, filed its own complaint arguing the tariffs exceed presidential authority. Additionally, a coalition of small U.S. businesses filed a similar lawsuit last week, claiming the tariffs have caused significant economic harm and disrupted supply chains.

Separately, California has filed its own lawsuit, arguing that the Trump administration's trade policies have inflicted “irreparable harm” on the state’s economy, its governor, and its citizens. California’s legal filing notably focuses on the broader constitutional implications of using emergency powers to enact economic policy—a central argument echoed by the multi-state coalition.

What’s Next?

The legal battle now heads to the U.S. Court of International Trade, where judges will evaluate whether Trump’s use of IEEPA constitutes a legitimate exercise of emergency powers or an overreach of executive authority.

While legal scholars are divided on the likelihood of the case succeeding, the coalition of states hopes to at least delay the implementation of further tariffs—especially a new round of reciprocal global tariffs that had been paused earlier this month but remain a looming threat.

If the court sides with the plaintiffs, it could set a precedent limiting how far future presidents can stretch emergency powers in economic policy. For now, the case marks a significant moment in the ongoing clash between federal executive power and states’ rights in shaping trade policy—and the impact it has on the everyday lives of Americans.