A coalition of more than a dozen states has filed their first rounds of legal action against President Donald Trump. That’s because they’re scrambling to deal with the recently tariffed imports on foreign competitors. The states argue that the president’s tariffs have a tremendous negative impact on the economy. They argue these tariffs are unconstitutional and serve as an arbitrary tax on consumers.
By April 23, President Trump was officially signing executive orders with great fanfare in the Oval Office. This action put political momentum behind tariff policy, which became a cornerstone of his administration’s policy. The president characterized the current 145% tariff on Chinese imports as “very high,” but expressed optimism in a softer approach, stating, “It won’t be that high. It’ll come down substantially. But it won’t be zero.”
New York Attorney General Letitia James criticized the president’s actions, asserting that he lacks the authority to impose taxes without legislative approval. She emphasized that “the president does not have the power to raise taxes on a whim, but that’s exactly what President Trump has been doing with these tariffs.”
These comments and testimony illustrate the continuing push and pull between state governments and the federal government when it comes to authority over trade policy. Their legal challenge seeks to stop the administration from rolling out any more tariffs that critics – including some in the business community – say disproportionately harm American consumers and businesses.
President Trump’s recent comments are a significant turnaround from before where he took a much more combative approach to China. Though earlier in April he seemed intent on fighting fire with fire, developments over the past few days indicate that he could be open to a more constructive conversation. This shift in demeanor has led many to speculate that the two sides may be starting to make amends and resolve the ongoing trade dispute.
U.S. Treasury Secretary on the matter Scott Bessent recently expressed his concerns with the state of affairs. Most importantly, he stressed that the United States and China have “an opportunity for a big deal here.” He echoed President Trump’s sentiments by indicating that tariffs “won’t be anywhere near” as high as 145%, although he clarified that they would not be eliminated entirely.
As discussions surrounding tariffs progress, stock markets have reacted positively, buoyed by hopes that U.S.-China trade tensions could soon ease. The possibility of a less confrontational stance from President Trump created a wave of optimism among investors.
China has opened the door to further discussions with the U.S., it holds ground. Foreign Ministry spokesperson Guo Jiakun stated, “China’s attitude towards the tariff war launched by the U.S. is quite clear: We don’t want to fight, but we are not afraid of it. If we fight, we will fight to the end; if we talk, the door is wide open.”
These exciting but difficult developments point to complexities and challenges that are foundational and fundamental to all international trade relations. The states have gone to court to enforce their concerns. They too worry about how unilateral tariffs disrupt domestic markets and degrade important international partnerships.