California sues Trump administration to block tariffs

California on Wednesday filed a lawsuit seeking to block US President Donald Trump's sweeping tariffs on foreign trading partners, accusing him of abusing his powers and inflicting financial harm on the state and nation.

Trump imposed 10 per cent tariffs on goods from all countries and higher tariffs for countries the administration says have high barriers to US imports, most of which he later paused for 90 days. He also imposed a 145 per cent tariff on China, with exceptions for certain electronics.

China has retaliated with a 125 per cent tariff against the US, and the European Union has approved tariffs to retaliate as well, though they are currently paused.

The US Constitution vests the authority to impose tariffs in Congress, and the law that Trump cites as authority for his new tariffs, the International Emergency Economic Powers Act (IEEPA), does not allow the president to "tax all goods entering the United States on a whim," the state said in its lawsuit.

"President Trump's new tariff regime has already had devastating impacts on the economy, creating chaos in the stock and bond markets, wiping out hundreds of billions of dollars in market capitalization in hours, chilling investment in the face of such consequential Presidential action with no notice or process, and threatening to push the country into recession," the lawsuit said.

California, the world's fifth largest economy and the largest importer of goods among US states, "bears an inordinate share" of the tariffs' costs," according to the lawsuit.

Tariffs could cripple California's 12 ports, which take in 40 per cent of goods imported to the US and provide steady tax revenue for the state. And retaliatory tariffs from China and other nations could harm California's agricultural exports, which totaled $23.6 billion in 2022, potentially costing thousands of jobs, according to the lawsuit.

White House spokesman Kush Desai said on Wednesday that California Governor Gavin Newsom should focus on addressing crime, homelessness, and high prices in his state instead of trying to block Trump's tariffs.

"The entire Trump administration remains committed to addressing this national emergency that's decimating America's industries and leaving our workers behind with every tool at our disposal, from tariffs to negotiations," Desai said.

In executive orders imposing the tariffs, Trump had invoked laws including the IEEPA, which gives presidents special powers to combat unusual or extraordinary threats to the US The Republican president has said that the United States' net trade deficit relative to the rest of the world is a national emergency endangering its manufacturing capacity and making it dependent on foreign adversaries.

In Wednesday's lawsuit, filed in federal court in San Francisco, Newsom and California Attorney General Rob Bonta, both Democrats, asked a judge to bar the Department of Homeland Security and Customs and Border Protection from enforcing the tariffs.

The Trump administration already faces three similar lawsuits - one in the New York-based Court of International Trade by business advocacy group Liberty Justice Center seeking to block all of the tariffs, one in Florida federal court by a small business owner seeking to block the tariffs on China, and a third filed in Montana by members of the Blackfeet Nation - a Native American tribe that spans Montana and Canada's Alberta's province - challenging Trump's tariffs on Canada.