A group of 25 Democratic-led U.S. states has filed a joint lawsuit against Donald Trump’s latest round of tariffs. The president signed off on a new set of trade levies a couple of weeks ago, imposing duties of between 10% and 12.5% on more than 90 countries, arguing they failed to comply with rules on forced labor.

In fact, the Republican president was trying to avoid a legal gap because the universal tariff that had been in place was about to expire. He turned to a different legal route, Section 301 of the Trade Act of 1974, to justify the new trade offensive.

A group of small businesses sued the Trump administration hours after the new levies took effect. The lawsuit argues that the government cannot maintain a preset, global tariff policy simply by switching from one law to another, said Liberty Justice Center, the organization representing the small companies in court.

Now, states that together represent half the nation’s territory are challenging the new tariffs in court. New York, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Kentucky, Massachusetts, Maryland, Maine, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Virginia, Vermont, Washington and Wisconsin filed a lawsuit Monday in the U.S. Court of International Trade in Manhattan.

The lawsuit essentially accuses the president and his administration of illegally using Section 301 to replace earlier tariffs that were struck down by the U.S. Supreme Court or that had already expired.

“After losing at the Supreme Court, the administration is once again trying to illegally raise taxes on families and businesses with a new round of tariffs,” New York Attorney General Letitia James said, according to Bloomberg. “No matter how the administration tries to justify it, the law and our Constitution are clear that the president does not have the power to impose sweeping tariffs on whatever countries he wants,” she added.

Trump has tried to rebuild his tariff wall with this latest package of duties on 60 economies, including the European Union, after the setback he suffered at the Supreme Court earlier this year. The Court found the reciprocal tariffs that he approved in April 2025 — aimed at addressing the chronic trade deficit the United States faces — to be unconstitutional.

After losing at the Supreme Court, Trump approved a universal 10% tariff, but it was only effective for 150 days and required congressional approval to be extended. Unable to secure Capitol Hill’s backing, the Trump administration devised another route before the temporary tariff expired. The solution was found in Section 301, which requires prior investigations by the U.S. Trade Representative.

That agency opened two investigations: one into 60 economies for failing to take sufficient measures to curb imports of goods produced with forced labor. That is the investigation approved on July 24 and the one that has been challenged in court by a group of small businesses and the 25 Democratic states.

The other investigation targets 16 countries accused of overproduction, a practice that drives down prices and harms domestic producers. That investigation has not yet concluded.