California Governor Takes Trump to Court Over 'Illegal' Tariffs

California Governor Gavin Newson sued President Donald Trump to halt its ‘reciprocal’ tax regime, arguing that he is implementing his protectionist trade agenda illegally. The federal lawsuit makes it the first state to challenge the Trump administration over its wide-ranging tariff plans, which have agitated the market globally and altercations among the USA and its trading partners.

Governor Newsom, a Democrat who’s considered a likely candidate to run for president in 2028 stated that “Donald Trump does not have the authority to unilaterally impose the largest tax hikes of our lifetime with his destructive tariffs,”  the Office further said “the situation creates “immediate and irreparable harm to California, the largest economy, manufacturing, and agriculture state in the nation.”

Why California Matters: The Golden State’s Role in Shaping America

The State's economy is significantly larger than any other state and surpasses many industrialised nations. Its GDP is $4.5 trillion, largest in the US and ranks among the world’s top economies. It also leads in agricultural production, especially fruits, vegetables and nuts. It's a major hub for technology and innovation, particularly in Silicon Valley. Many tech giants are headquartered in the state.

In 1848, gold was found along the American River near Sacramento, the present Capital of California. It sparked a rush that accelerated California’s entry into the Union and changed its landscape. The Gold Rush led to a rapid population boom and eventually led it to gain statehood.

In 2024, Its GDP accounts for a substantial portion of 14% of the US’s total GDP. According to California Governor Office the economy ranks 5th globally, after the USA, China, Germany and Japan. The state’s economy is also a global leader in international trade, with a large volume of trade flowing in and out. The state has a strong military presence, with numerous defense installations and significant spending on defense contracting.

Why did Trump impose tariffs?

On April 2, Trump levied a baseline tariff of 10% on imports of all the countries, with significantly higher rates targeting nations he claimed restricted access to U.S. goods. While most of the harsh tariffs were halted for 90 days, China was excluded from this relief, facing tariffs up to 145%, except for some electronics. To retaliate, China hit back with its own 125% tax on American products.

Trump justified the taxes using the International Emergency Economic Powers Act (IEEPA) of 1977, which allows the President to respond to national security threats. However, California Governor's lawsuits challenged this justification, arguing that IEEPA does not permit the President to unilaterally declare a trade emergency or impose such high duties without congressional approval.

Why is California opposing Trump's tariff policies?

A global economic powerhouse, is suing to halt Trump’s tariffs , arguing they have damaged trade ties with key partners like China, Mexico and Canada and will cause further economic harm. Governor Newsom and Attorney General Bonta are requesting a court injunction to block the Department of Homeland Security and Customs and Border Protection from implementing these taxes. This lawsuit joins at least two others: a New York-based case by the Liberty Justice Center to stop all tariffs and a federal challenge by a Florida small business owner against tariffs targeting China. The Governor has filed the suit in United States District Court for the Northern District of California.

Is it legal for Trump to use emergency law to impose tariffs?

The President is currently dealing with three lawsuits challenging his tariff policies. While major industries affected by the tariffs have not yet pursued legal actions, two cases have been brought by conservative legal groups representing small businesses, and another by the members of the Blackfeet Nation in Montana. The justice department is pushing to move these lawsuits from the U.S. district courts to the court of international trade in Washington, that handles trade related legal disputes against the government.