The news: The state of California and Governor Gavin Newsom are suing President Donald Trump in an attempt to end his sweeping tariffs, which they say are unlawful and inflict “unique harm” on the world’s fifth-largest economy.

The background: As the largest importer and second-largest exporter in the US, California is particularly vulnerable to anything that could stem the flow of global trade.

• Trump’s initial round of tariffs singled out Mexico, Canada, and China, California’s three largest trading partners. Over 40% of imports to the state originated from those countries last year, and the three nations took in over one-third of California’s exports.
• A decline in imports would also hurt California’s ports, a significant source of both revenues and jobs for the state, while retaliatory tariffs would hurt farms and other small businesses reliant on exports.

The big takeaway: California’s lawsuit adds to a growing pile of legal challenges to the tariffs, all of which so far make a similar argument: that Trump lacks the authority to implement the sweeping duties, and that the tariffs require congressional approval to take effect.

A separate suit filed by the Liberty Justice Center on behalf of five small businesses also contends that a trade deficit in goods does not constitute a national emergency that would justify the use of the International Emergency Economic Powers Act. That point is underscored by the fact that the administration’s wide tariff net ensnares countries that the US does not have a trade deficit with, further weakening the White House’s argument for implementing those tariffs.

Go further: Read our report on the Impact of Tariffs on US Businesses.

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