Why did California file a lawsuit against U.S. tariffs?

California's Governor and Attorney General filed the lawsuit arguing that President Trump lacked legal authority to unilaterally impose broad tariffs, which have harmed the state’s economy.

What is the basis of California's legal challenge to the tariffs?

The lawsuit claims that the tariffs violate the International Emergency Economic Powers Act (IEEPA), which does not grant the President authority to impose universal import taxes.

How have the U.S. tariffs impacted California’s economy?

California, the world’s fifth-largest economy, has been hit hard, especially in agriculture and entertainment sectors, due to retaliatory tariffs and disruptions in global trade.

Which countries’ goods are most affected by the U.S. tariffs?

Goods from Mexico, Canada, and China are heavily impacted, with California particularly vulnerable since nearly 40% of its imports come from these three countries.

What is the significance of California’s agricultural exports in this case?

California is the top U.S. agricultural exporter and the world’s largest almond producer; retaliatory tariffs on its exports have jeopardized billions in revenue and thousands of jobs.

What are the broader implications of the lawsuit for global trade?

The case could reshape the limits of presidential trade authority and affect global markets, international relations, and future U.S. tariff policy.

California Sues to Stop US Tariffs Imposed by Trump, Citing Economic Harm

Even though the primary aim of US tariffs on nearly every country in the world, including longtime allies and trading partners, was to strengthen its national economy and level the playing field between the US and other countries, based on the first results, it seems that there are many adverse effects on US citizens and businesses.

As a result, on April 16, 2025, the Governor of California and the California Attorney General filed a lawsuit in Federal Court challenging President Trump's authority to unilaterally enact tariffs.

Reasons Behind the Lawsuit

In the lawsuit, the Governor and Attorney General stated that President Trump's decision to unilaterally impose a universal 10% tariff on nearly all imported goods, in addition to reciprocal tariffs on numerous countries, before pausing them for 90 days, had a devastating impact on the economy.

Moreover, California residents and small businesses are directly affected by these tariffs, due to the universal 10% tariffs and additional 25% tariffs imposed on Mexican and Canadian goods, as well as the 145% retaliatory tariffs imposed on China. Industries most affected by these tariffs are agriculture and entertainment, which face retaliatory tariffs imposed by China and are threatened by other countries.

The Governor and Attorney General underlined that the US President is not authorized to impose tariffs. Furthermore, under the International Emergency Economic Powers Act (IEEPA), the US President does not have the authority to tax all goods entering the US.

Underlining that California’s economy is the fifth-largest in the world, behind only the US, China, Germany, and Japan, and the most populous state in the US, the Governor and Attorney General added that it suffers the most from the unprecedented tariffs imposed.

It is further stated in the lawsuit that nearly 40% of California imports come from Mexico, Canada, and China, three countries that were specifically targeted by the tariffs. Additionally, retaliatory tariffs imposed by other countries also negatively affect California, as the US's second-largest exporter, ranking first in agricultural exports.

For example, California is the world's largest almond producer, accounting for 76% of the world's almonds and exporting most of them, which contributes approximately USD 9.2 billion to the US GSP and secures around 110,000 jobs.

Conclusion

The Governor and Attorney General requested that the Court declare that President Trump’s IEEPA Tariff Orders are unlawful and void. The tariff impacted the whole international trade, causing chaos on stock and bond markets, and pausing significant investments.

Therefore, the outcome of the lawsuit is not only significant for the United States and its citizens, but also for the global economy and trade as a whole.

Source: Governor Gavin Newsom, Complaint for Declaratory and Injunctive Relief, VATabout