A lawyer for the Department of Justice said the International Emergency Economic Powers Act empowers the president to negotiate trade deals.
A group of 12 states asked a federal court on Wednesday to put President Donald Trump’s sweeping tariffs on imports on hold, arguing he overstepped his authority by declaring a national emergency to impose levies on the majority of U.S. trading partners.
A three-judge panel of the New York-based Court of International Trade heard arguments in the lawsuit filed by the Democratic attorneys general of New York, Illinois, Oregon, and nine other states in April.
The suit argues Trump’s tariff policies “reflect a national trade policy that now hinges on the President’s whims rather than the sound exercise of his lawful authority.”
During Wednesday’s hearing, the states said Trump has misinterpreted a law called the International Emergency Economic Powers Act (IEEPA), which provides executive authority to regulate various economic transactions following a declaration of national emergency, to justify the tariffs.
Trump has claimed the IEEPA allows him to “set tariffs of any amount, on any country, for any length of time, and no court can review it,” Brian Marshall, an attorney for the state of Oregon, told the court.
Marshall said Trump’s assertion was incorrect, noting the law is meant to address “unusual and extraordinary” threats to the United States and requires presidential actions to be closely tied to a specific situation the executive branch seeks to resolve.
The attorney added that a president may not use tariffs or other actions “only for leverage” under the IEEPA.
Brett Shumate, a lawyer for the Department of Justice, countered that leverage is a valid reason to impose tariffs under IEEPA. He said the act empowers the president to negotiate trade deals and other foreign policy goals.
“The purpose of these tariffs is to create pressure,” Shumate said. “The tariffs are right now giving the president the leverage that he needs.”
Shumate further argued that only Congress, not U.S. states or the courts, has the authority to review a president’s actions taken in response to an IEEPA emergency.
Though the IEEPA does not specifically use the word “tariff,” it is included under its authority to “investigate, regulate, or prohibit” transactions, he said.
The court did not immediately rule on the legality of Trump’s tariffs. A decision is expected in the coming weeks.
Trump Unveils Tariffs on China, Canada
Trump first imposed tariffs on China, Mexico, and Canada in February in an effort to stop the flow of illegal fentanyl into the United States.
In April, his administration imposed a 10 percent baseline tariff on most countries and higher rates on countries with which the United States has the largest trade deficits, particularly China.
A week later, he issued a 90-day pause on the higher tariffs and raised the levies on China to 145 percent, prompting Beijing to retaliate with 125 percent levies on U.S. imports, effectively imposing a trade embargo on each other’s goods.
The Trump administration has since temporarily reduced the steepest tariffs on China while the two countries work on a longer-term trade deal.
Trump has cited the IEEPA for both sets of tariffs, stating that foreign trade and economic practices as well as the ongoing distribution of deadly fentanyl-laced drugs have created a national emergency in the United States.
The states say that tariffs are not a reasonable response to either of those issues, that Trump lacks the authority to impose the levies, and that only Congress has the ability to collect duties on imports.
Their lawsuit is one of at least seven filed against the Trump administration challenging its tariff policies. The state of California filed a separate challenge in federal court in San Francisco earlier this month.
Reuters contributed to this report.
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