Trump's tariff strategy tests the limits of presidential power and legal authority

As President Donald Trump escalates his use of sweeping tariffs under the International Emergency Economic Powers Act (IEEPA), legal challenges from California and a coalition of 12 states are now testing where--and how--those claims should be adjudicated.

Filed in April, the dual lawsuits seek to halt tariffs Trump has imposed on imports from traditional allies and rivals alike. California and Governor Gavin Newsom filed in the U.S. District Court for the Northern District of California, while a group of 12 states, led by Oregon, brought their challenge before the U.S. Court of International Trade (CIT).

Presidential power and the IEEPA

Enacted in 1977, the IEEPA grants the president the authority to regulate economic transactions in response to "unusual and extraordinary threats" originating abroad. It has traditionally been used to impose sanctions, block foreign assets, and limit trade with hostile governments.

But Trump has taken the statute in a novel direction--using it as a foundation to impose tariffs on a wide range of imports, including goods from U.S. allies like Canada and Mexico, as well as those from our key economic and political rival, China. These moves, framed as responses to national security threats, have unsettled markets, strained alliances, and prompted a constitutional clash over trade powers.

While Congress holds constitutional authority over tariffs, the IEEPA has increasingly become a tool for unilateral executive action. Legal scholars and state officials are now asking: has the president gone too far?

Trump's use of the IEEPA: From TikTok to tariffs

During his first term, Trump invoked the IEEPA to limit the operations of TikTok in the U.S., citing national security concerns tied to its Chinese ownership. Courts temporarily blocked that order, and the Biden administration ultimately rescinded it in 2021.

In 2024, Congress passed the Protecting Americans from Foreign Adversary Controlled Applications Act (PAFACA), banning apps like TikTok unless divested from foreign adversaries. Although TikTok briefly suspended U.S. operations in early 2025, Trump extended enforcement deadlines twice via executive order. The administration now seeks a sale of TikTok to a U.S.-based entity.

In March and April 2025, Trump expanded the IEEPA's use even further, imposing 10% universal tariffs and country-specific surcharges--up to 125% on Chinese imports. He justified the tariffs by claiming they would address trade imbalances and compel better deals for the U.S.

The result: stock and bond markets plunged, losing $10 trillion in value. According to Yale's Budget Lab, American households are now absorbing average costs of $4,900 annually due to increased prices. Economists estimate current tariffs effectively impose a 28% surcharge on imports--the highest since 1901.

Despite these consequences, Congress has yet to step in to restrict the president's trade authority.

The legal fight: California and the states respond

With federal lawmakers sidelined, state governments have taken the lead in challenging Trump's tariff strategy.

On April 16, 2025, California and Governor Newsom filed suit in the Northern District of California, arguing the tariffs are unconstitutional and not authorized by the IEEPA. A week later, Oregon and 11 other states filed in the Court of International Trade, making similar claims with broader statutory challenges.

California v. Trump

California's case asserts two key claims:

 Ultra vires conduct: That the IEEPA does not authorize the president to impose tariffs and Trump's actions exceed statutory bounds.

 Separation of powers: That the president is usurping congressional authority by unilaterally imposing trade restrictions.

The lawsuit emphasizes the economic impact of the tariffs on California's ports, businesses, and state budget, framing the harm as a violation of both federal law and constitutional structure.

Oregon et al. v. Trump

The 12-state coalition expands the legal argument by adding Administrative Procedure Act (APA) claims, alleging that:

 Customs and Border Protection's guidance implementing the tariffs is arbitrary and capricious,

 The agency lacks statutory authority to enforce the tariff orders, and

 The orders themselves lack the required nexus to national emergencies under the IEEPA.

Unlike the California filing, the states' complaint requests a three-judge panel, signaling the national importance and legal complexity of the case.

Forum matters: Why two courts?

The lawsuits also raise the procedural question: what is the correct forum for challenging tariffs imposed under emergency powers?

The U.S. District Courts have broad jurisdiction over federal questions, including executive authority challenges. But the U.S. Court of International Trade (CIT) holds exclusive jurisdiction over disputes involving customs, tariffs, and import regulations.

Both forums have plenary power to grant declaratory and injunctive relief, but CIT brings specialized expertise in trade law and customs enforcement. It was restructured under the Customs Courts Act of 1980 to eliminate jurisdictional confusion with district courts.

California's decision to file in district court likely reflects its focus on constitutional overreach and state-level harm. The multi-state coalition's filing in CIT appears more procedural and comprehensive, targeting the implementation mechanics and seeking nationwide clarity.

Comparative Legal Strategy

Both suits argue that Trump's tariff orders lack proper statutory grounding and are disconnected from the type of emergency the IEEPA is meant to address. Neither accepts that a trade deficit--or general economic imbalance--qualifies as a national emergency under the law. Especially where that economic imbalance simply reflects the U.S. business and consumer communities' voluntary economic decisions to purchase more goods and services from overseas suppliers than the trading counterparties are willing, or even financially able, to buy from the U.S.

Conclusion: A constitutional collision over trade

The dual filings represent an urgent effort by the states to rein in what they view as executive overreach in trade policy. Whether through constitutional argument or administrative law, both complaints aim to reassert the role of Congress--and the courts--in policing the boundaries of presidential power.

With overlapping issues filed in separate forums, a potential consolidation or coordinated ruling may become necessary. For now, the cases highlight not only the legal limits of the IEEPA, but also the broader debate over the president's power to unilaterally reshape U.S. trade policy.

Stay tuned. The courts--and the Constitution--are now center stage in the tariff wars.