With the state budget hanging precariously in the balance, Gov. Gavin Newsom filed a lawsuit to block President Donald Trump’s tariff powers.
The lawsuit, which Newsom and Attorney General Rob Bonta filed in federal court in San Francisco, argues that Trump does not have the constitutional authority to unilaterally enact tariffs. Trump cited the United States’ large trade deficit to declare a national emergency earlier this month and impose sweeping import taxes on the rest of the world.
Visiting an almond farm in Turlock, which stands to lose export business to retaliatory tariffs, Newsom expressed anger over the “toxic uncertainty” of the president’s trade policy. He said the policies are harming California more than any other state and called the tariffs a betrayal of the voters who supported Trump because of his promise to bring down the cost of living.
“This is recklessness at another level. The geopolitical impacts are outsized. The trade impacts are outsized,” Newsom said. “No rationale, no plan, no conscience to what it’s doing to real people.”
In a matter of days in early April, Trump invoked the International Emergency Economic Powers Act of 1977 to establish a universal 10% tariff on all countries importing goods to the United States, with even higher reciprocal tariffs on some nations, then abruptly reversed course hours after they took effect, pausing most of the reciprocal tariffs while ratcheting up the import tax on China to 145%.
The chaos tanked the stock market, a huge risk for California’s forthcoming budget, which depends disproportionately on income tax revenue from capital gains earned by the wealthiest taxpayers. The state is also particularly vulnerable to other economic pain from the tariffs, because China is California’s largest trading partner, propping up manufacturing, agriculture, tourism and major ports in Los Angeles, Long Beach and Oakland.
Other significant potential impacts for California include driving up the cost of construction materials just as Los Angeles begins rebuilding from a series of devastating fires that flattened several neighborhoods in January.
California’s economic outlook is declining
Newsom said today that, anticipating higher inflation and higher unemployment from the tariffs, he has downgraded California’s economic outlook in a revised budget proposal that he plans to unveil next month. Though did not speak to Trump about the lawsuit, he said he gave the White House a heads up.
In a statement, the White House slammed Newsom for undermining Trump’s efforts to rescue American industry.
“Instead of focusing on California’s rampant crime, homelessness, and unaffordability, Gavin Newsom is spending his time trying to block President Trump’s historic efforts to finally address the national emergency of our country’s persistent goods trade deficits,” spokesperson Kush Desai said.
In their lawsuit, the fifteenth that California has filed against the Trump administration since January, Newsom and Bonta asked a judge to immediately pause Trump’s tariffs.
The state contends that the International Emergency Economic Powers Act specifies many remedies a president can take in response to a foreign economic threat, but tariffs are not among them. Without this specific authorization from Congress, the lawsuit argues, Trump’s actions are “unlawful” and “unprecedented.”
Joining Newsom in Turlock, Bonta said Trump was “attempting to override Congress and steamroll the separation of powers” and that his “rogue and erratic tariffs” must be stopped to prevent further damage to California’s economy.
“Trump has had to resort to creating bogus national emergencies that defy reason,” Bonta said. “Bottom line: Trump doesn’t have the singular power to radically upend the country’s economic landscape. That’s not how democracy works.”
Alan Sykes, who teaches international trade law at Stanford Law School, told CalMatters that California’s case has merits, but it may be difficult to win.
He said the international powers act is ambiguous about tariffs; they are not explicitly mentioned in the law, though there is language allowing for the regulation of imports and exports. But Congress has also passed other laws over the years giving away their constitutional power to set tariffs. Sykes noted that Trump could shift to citing those statutes instead if his tariffs are struck down.
“Congress has badly over-delegated authority to the president in this regard,” Sykes said. “I’m not terribly optimistic that the courts are going to rein that in.”
The lawsuit continues Newsom’s shift back toward a more aggressively confrontational stance against the Trump administration. After the Los Angeles wildfires, the governor sought to reset his relationship with Trump as he lobbied for federal disaster aid.
But even though Congress has yet to approve any further assistance for Los Angeles, Newsom has begun more vocally opposing the president’s economic policies in recent weeks.
In the wake of Trump’s tariffs announcement earlier this month, Newsom said California would pursue its own “strategic partnerships” on international trade. The state this week launched a new tourism campaign in Canada, which has been the second largest source of international visitors to California but has already seen a steep decline this year.
Newsom was unusually harsh when speaking about Trump’s tariffs in Turlock, calling them the “poster child” for stupidity and an example of “crony capitalism” because of the president’s willingness to exempt products from favored industries such as electronics manufacturing.
“This is the personification of corruption,” Newsom said. “How in the hell are we sitting by and letting this happen?”
