California Governor Gavin Newsom has taken the unprecedented move of filing a lawsuit directly challenging the emergency power United States President Donald Trump has deployed to impose tariffs that have demolished global trade.
Newsom’s lawsuit – the 16th California has filed against Trump since January - challenges the President's right to evoke the International Emergency Economic Powers Act (IEEPA) to enact the tariffs.
Ultimately, the lawsuit argues that Trump has exceeded the bounds of presidential power outlined in the law.
The IEEPA, passed in 1977, gives the president broad authority to regulate certain financial transactions when declaring a national emergency in response to an “unusual and extraordinary threat.”
The IEEPA traditionally sanctions countries, companies and individuals.
What does California want?
What Newsom specifically wants the federal court judge presiding over the case to do is bar the Departments of Homeland Security and Customs and Border Protection from enforcing the tariffs.
“President Trump’s unlawful tariffs are wreaking chaos on California families, businesses, and our economy — driving up prices and threatening jobs,” Newsom said.
“We’re standing up for American families who can’t afford to let the chaos continue.”
The California governor argues that the act has never been used by any president for such levies. He also argues that ultimately such powers rest with the U.S. Congress.
The lawsuit cites multiple Supreme Court rulings against the Biden administration in its quest to forgive student debt.
In that instance, the lawsuit notes, the high court called Biden's manoeuvres a "transformative expansion" of presidential authority.
Assuming the Supreme Court is consistent, Newsom said this lawsuit is a lock for the state.
Tariffs could cripple state revenue
While California is the first challenge from a U.S. state against Trump’s signature foreign policy big stick, several other lawsuits filed by small businesses and a civil rights group have also challenged Trump's tariff actions.
As the world’s fifth largest economy, California stands to lose billions to tariffs with major state industries from Silicon Valley to agriculture heavily dependent on global trade.
As well as producing 82% of the world's almonds, California is also America’s sole producer of artichokes, figs, olives, walnuts and raisins.
In total, California's agricultural exports reached $23.6 billion in 2022.
Governor Newsom’s lawsuit argues that tariffs could decimate California's 12 ports, which account for 40% of goods imported to the U.S.
Trump justifies tariffs action
Meanwhile, Trump has defended his use of the International Emergency Economic Powers Act by asserting America’s trade deficits with other countries pose a “national emergency.”
"Instead of focusing on California's rampant crime, homelessness, and unaffordability, Gavin Newsom is spending his time trying to block President Trump's historic efforts to finally address the national emergency of our country's persistent goods trade deficits," White House spokesman Kush Desai said.
Trump became the first president to use the IEEPA to impose tariffs when he announced levies in February against China, Mexico and Canada to respond to the “extraordinary threat” of undocumented immigrants and illegal drugs moving through U.S. borders.
