California Gov. Gavin Newsom filed a
The lawsuit argues the
California is the first state to challenge Trump's tariffs. The president announced tariffs of at least 10% on all of the nation's trading partners on April 2, but then put a 90-day pause on all increases except for the 125% tariff imposed on China.
The Golden State is poised to lose more revenues than any other state, said Newsom, adding, "that's why we are asserting ourselves on behalf of 40 million Americans."
The governor said the state engaged in nearly $675 billion in two-way trade last year and stands to lose billions if international commerce declines and has already lost money from the stock market drop. Mexico, Canada and China are the state's three largest trade partners.
The tariffs' effect on the
"Capital gains play an
The stock market losses, which have been compared to those experienced during the 2020 pandemic and the 2008 economic crash have already forced the state to lower its gross domestic product estimate ahead of May budget revisions, the governor said.
The governor annually revises in May the budget he proposed in January.
Trump's actions have "significantly downgraded the GDP projections for the state of California," said Newsom, who noted the state comprises 14% of the nation's GDP. So, economic harm to California also causes harm to the national economy.
Up until now, California General Rob Bonta has been the face of the
"President Trump's unlawful tariffs are wreaking chaos on California families, businesses, and our economy — driving up prices and threatening jobs," Newsom said. "We are standing up for American families who can't afford to let the chaos continue."
Bonta called the president's implementation of tariffs chaotic, deeply troubling and illegal.
"As the fifth largest economy in the world, California understands global trade policy is not just a game," Bonta said. "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."
The lawsuit, filed in the U.S. District Court for the northern district of California asks the court to declare the tariffs imposed by President Trump void and enjoin their implementation.
It further argues that Trump lacks the authority to unilaterally impose tariffs against Mexico, China and Canada or create an across the board 10% tariff; and his use of the IEEPA is unlawful and unprecedented.
The Act gives the president authority to take certain actions if he declares a national emergency in response to a foreign national security, foreign policy or economic threat.
The law, which was enacted by Congress in 1977, doesn't include tariffs as one of the actions available to the president and this is the first time a president has used the law to impose tariffs, according to the lawsuit.
"The reality is the U.S. Constitution gives Congress the power of the purse," Bonta said. "It's Congress' responsibility to set and collect taxes, duties and excises, including tariffs, not the president's. Congress hasn't authorized these tariffs."
"We are asking the court to rein in the president, restore our economy and uphold the constitution," Bonta said.
