Economic Fallout Prompts California Lawsuit Against Trump’s Tariffs
California Governor Gavin Newsom and Attorney General Rob Bonta filed a lawsuit Wednesday challenging former President Donald Trump’s use of emergency powers to impose sweeping tariffs on international trade, claiming the measures violate federal law and have caused widespread damage to the state’s economy.
The complaint, filed in the U.S. District Court for the Northern District of California, seeks to block implementation of the tariffs and declare them unlawful. The lawsuit argues that Trump exceeded his authority under the International Emergency Economic Powers Act (IEEPA), a statute passed by Congress in 1977 that does not explicitly permit the use of tariffs.
“President Trump’s unlawful tariffs are wreaking chaos on California families, businesses, and our economy, driving up prices and threatening jobs,” Newsom said in a statement. “We’re standing up for American families who can’t afford to let the chaos continue.”
Bonta echoed the sentiment, calling the tariffs a reckless overstep that violates the Constitution.
“The President’s chaotic and haphazard implementation of tariffs is not only deeply troubling, it’s illegal,” Bonta said. “California understands that global trade policy isn’t a game. This lawsuit is about protecting our economy, our communities, and our future.”
At issue are tariffs the Trump administration imposed through the IEEPA on goods from Mexico, China, and Canada. California officials argue that the IEEPA was never intended to give the president tariff authority, and the economic fallout from the decision has been severe. The state has reportedly suffered billions of dollars in losses due to inflated prices and disrupted supply chains.
The state’s legal argument also relies on the U.S. Supreme Court’s “major questions doctrine,” which requires that executive actions with significant national economic implications receive explicit congressional authorization. The lawsuit points to recent rulings in which the Court struck down federal initiatives that lacked such authorization.
California, which had a gross domestic product of $3.9 trillion in 2023, making it the world’s fifth-largest economy, argues that it is especially vulnerable to the effects of tariffs. The state’s economy is closely tied to international trade, particularly with Mexico, Canada, and China, which collectively account for more than 40% of California’s imports and a third of its exports.
In 2024, California engaged in approximately $675 billion in two-way trade. Officials say small business exporters, manufacturers, and farmers have borne the brunt of increased costs resulting from the tariffs.
More than 60,000 small businesses in California export goods, and the state leads the nation in both manufacturing output and agricultural production. The lawsuit warns that additional trade disruptions could harm millions of workers, derail supply chains, and further strain California’s economic ties abroad.
In response to the tariffs, Newsom’s administration has also pursued strategic trade partnerships and launched international campaigns to bolster California’s tourism and export sectors, including initiatives focused on maintaining strong ties with Canada.
The federal government has not yet responded to the lawsuit.
