State Attorneys General Challenge US President’s Tariff Authority Under IEEPA

The US president has imposed and modified tariffs on key trading partners such as China, Canada, Mexico, and the European Union over the last three months. These tariffs rely on the International Economic Emergency Powers Act, which has never previously been used to justify the imposition of tariffs. On May 7, 2025, several state attorneys general filed two lawsuits challenging the president’s authority under the act. The suits represent challenges by blue states to the US administration’s exercise of authority that, in the view of the state attorneys general, harms citizens in their states.

State attorneys general from the opposing party of the federal administration frequently challenge executive actions (or fill the void), a trend observed since the Reagan administration, and thus, this is not necessarily a new dynamic.

This LawFlash examines the background of the International Economic Emergency Powers Act (IEEPA) and the implications of the state attorneys general’s legal challenges.

IMPOSITION OF TARIFFS UNDER IEEPA

Although the Constitution of the United States gives the US Congress the power to regulate foreign commerce and impose import tariffs, Congress has authorized the executive branch to impose tariffs in certain circumstances. IEEPA was enacted by Congress in 1977. It does not expressly authorize the president to impose tariffs.[1] Instead, it allows the president to “regulate . . . importation” in order “to deal with any unusual and extraordinary threat . . . to the national security, foreign policy, or economy of the United States, if the President declares a national emergency with respect to such threat.” No court has yet to address whether IEEPA authorizes the imposition of tariffs.

The president has relied primarily on IEEPA to justify the imposition of tariffs since taking office. Between February and April 2025, the president declared national emergencies relating to drug trafficking, immigration, and trade deficits to impose tariffs of at least 10% on nearly 60 countries. The president subsequently modified and paused various parts of these tariffs.[2]

For further analysis on tariff developments, we invite you to revisit our previous publications, including Global Implications of the US Administration’s Tariff Strategy (March 31, 2025), Reciprocal Tariffs Affect Most Products From Nearly All Trading Partners (April 7, 2025), and De Minimis Exception Eliminated for Imports from China (May 1, 2025).

STATE AG CHALLENGES TO THE PRESIDENT’S AUTHORITY UNDER IEEPA

California v. Trump

On April 16, 2025, California filed a complaint in the Northern District of California against President Donald Trump, the US Department of Homeland Security, US Customs and Border Protection (CBP), and the heads of both agencies, claiming that the president lacks authority to issue tariff orders under IEEPA. California’s complaint alleges that the IEEPA drafters intended for the statute to limit presidential authority, that the language authorizing the president to “regulate . . . importation” does not authorize the president to impose tariffs, and to the extent it does, it requires that the president consult Congress before doing so.

California alleges that its position as the fifth-largest economy in the world exposes it to unique harms from the tariffs, including lost tax revenue and job availability at California’s 11 public ports. Moreover, California claims that “whipsaw actions on tariffs” will have “drastic impacts” on California’s budget and the state’s ability to enter into contracts with vendors.[3]

On May 13, California moved for a preliminary injunction, citing irreparable harms, such as an “extraordinary loss of essential revenue,” higher consumer costs, and diversion of “significant resources” to respond to the tariffs.[4] Defendants seek to transfer the case to the Court of International Trade.

Oregon v. Trump

On April 23, 2025, 12 state attorneys general brought suit against the same set of defendants in the Court of International Trade. The lawsuit challenges the president’s authority to issue tariffs under IEEPA, CBP’s authority to collect tariff revenue, and the legality of CBP’s guidance in implementing tariff orders. On May 7, 2025, the states moved for a preliminary injunction, citing the threat of irreparable harm stemming from the business uncertainty of the tariff agenda and the president’s “intent to bypass” procedural protections to impose additional tariffs.[5]

The states echo two arguments made by California in its lawsuit. First, they point to the history of IEEPA to argue that Congress enacted it to restrain the president’s powers. Second, they argue that IEEPA’s “regulate . . . importation” language does not authorize the president to impose tariffs. Even if it did, the states argue that the president has failed to identify an “unusual and extraordinary” threat in any national emergency he has declared.[6] Moreover, they claim that none of the tariffs address the threats they identify. For example, they suggest that tariffs against Canada and Mexico to address drug trafficking will not resolve the threats “for the obvious reason that drug traffickers will not pay tariffs on the drugs that they illegally smuggle into this country.”[7]

The states allege that the tariffs “have already harmed” the state entities that import goods, as well as vendors and suppliers to these state agencies.[8] They echo California’s concerns about the harm caused by uncertainty in the state budgeting and procurement efforts.

On May 13, 2025, in response to a court order, the states submitted a motion for summary judgment in which they sought a permanent injunction against the tariffs’ implementation and a declaration that the tariffs are unlawful. They also asked the court to “set aside” CBP’s actions implementing the tariffs.[9]

TAKEAWAYS

The US tariff strategy continues to reshape global trade dynamics, and legal challenges have contributed to growing uncertainty. If either legal challenge discussed succeeds, it may force the president to seek congressional approval before imposing future tariffs. As always, companies that stay informed, diversify supply chains, and proactively adjust to policy shifts will be best positioned.

HOW WE CAN HELP

Our team will continue to monitor these matters. In the meantime, please reach out to your regular Morgan Lewis contact or any author or contact for guidance.

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