President Trump dodged a Supreme Court smackdown on his tariffs only to face 24 states slamming the door on his next move—what if this time the Constitution finally clips the wings of runaway executive power?
Story Snapshot
- Supreme Court struck down Trump’s IEEPA tariffs on February 20, 2026, in a 6-3 ruling, freeing up over $150 billion in potential refunds for importers.
- Trump pivoted immediately to Section 122 of the 1974 Trade Act for 15% global tariffs, a statute never before used for trade deficits.
- Oregon AG Dan Rayfield leads 24-state coalition suing in U.S. Court of International Trade, calling the move an illegal end-run around Congress.
- States argue tariffs act as unconstitutional taxes hiking prices on American families amid affordability crises.
- Nearly 90% of prior tariff costs hit U.S. consumers and businesses, with Oregon alone facing $670 million in payments.
Supreme Court Rejects IEEPA Tariffs
Oregon Attorney General Dan Rayfield led a 12-state lawsuit in spring 2025 against Trump’s broad tariffs imposed under the International Emergency Economic Powers Act. The Supreme Court heard oral arguments in November 2025. On February 20, 2026, a 6-3 majority led by Chief Justice John Roberts ruled the tariffs unlawful. The decision deemed them taxes reserved for Congress, not executive emergency powers. Importers now seek refunds on over $150 billion collected. Justice Kavanaugh dissented, noting refund processes fall to the administration.
Trump Invokes Section 122 in Response
Within weeks of the Supreme Court loss, Trump issued an executive order citing Section 122 of the Trade Act of 1974. This provision allows up to 15% tariffs for 150 days during large balance-of-payments deficits. The administration applied it to most worldwide products to tackle trade imbalances. Critics highlight Section 122’s historical disuse for broad trade deficits, unlike true balance-of-payments crises involving currency reserves. Oregon firms paid roughly $670 million under the prior regime. States frame this as a blatant bypass of judicial limits.
24 States Launch Expanded Lawsuit
Oregon AG Dan Rayfield spearheads the new suit, State of Oregon, et al., v. Trump, et al., filed in the U.S. Court of International Trade in March 2026. The coalition grew to 24 states, including 22 attorneys general and two governors. Connecticut AG William Tong and Treasurer Erick Russell joined, decrying the tariffs as blatantly unconstitutional. They cost Connecticut $1.7 billion already. The complaint charges misuse of Section 122, separation-of-powers violations, and breaches of the Administrative Procedure Act.
Rayfield asserts no president can levy taxes disguised as tariffs. Tong emphasizes protection for taxpayers and state budgets. The states demand an injunction to halt collection. Importers align with plaintiffs, pursuing separate refunds. Congressional supporters like Reps. Joe Courtney and Rosa DeLauro back the effort. This broader alliance signals unified resistance to executive overreach.
Economic Harm Drives State Action
Federal Reserve Bank of New York data shows 90% of 2025 tariff costs passed to American consumers and businesses. Prices rose on groceries, energy, cars, and more. Trade-dependent states like Oregon suffer most through manufacturing and agriculture. Small businesses and families bear billions in higher costs during affordability squeezes. The suit portrays tariffs as hidden taxes without congressional approval. Success could lower import prices across sectors. Long-term, it may compel Congress to reclaim trade authority.
[Ilya Somin] Twenty-Four States Led by Oregon File Lawsuit Challenging Trump's Section 122 Tariffs https://t.co/rcVrDPWUU2
— Volokh Conspiracy (@VolokhC) March 5, 2026
Politically, the case reinforces constitutional checks after the Supreme Court precedent. Trump’s agenda faces setback if courts block this pivot. Businesses seek certainty amid refund chaos. Common sense aligns with states: American families shouldn’t fund flawed trade fixes through inflated bills. Facts confirm executive limits protect against such power grabs, upholding conservative principles of restrained government.
Sources:
US Supreme Court sides with Oregon AG Dan Rayfield in Trump tariff case (Oregon Journalism Project)
Oregon could get $670M in Trump tariff refunds after Supreme Court ruling (Axios)
Supreme Court strikes down Trump’s sweeping tariffs, upending central plank of economic agenda (OPB)
The State AG Whose Lawsuit Brought Down Trump’s Tariffs (Governing.com)
Supreme Court Opinion (SCOTUS)
