More than 20 U.S. states have filed a joint lawsuit seeking to block the 10% global additional tariff imposed by President Trump last month under Section 122 of the Trade Act of 1974. This follows the U.S. Supreme Court's ruling that his earlier broad tariffs under the International Emergency Economic Powers Act (IEEPA) were invalid.

According to a filing submitted Thursday to the U.S. Court of International Trade,the complaintplaintiff states, including New York, California, and Minnesota, allege that Trump failed to meet the statutory conditions for imposing such tariffs, requesting the court to declare the tariff invalid and order a refund of tariffs already paid by the plaintiff states.

Last month, after the Supreme Court struck down his tariffs under IEEPA, Trump immediately invoked Section 122 of the Trade Act of 1974 toimpose a 10% global additional tariffon most goods imported into the U.S. Section 122 allows the president to impose tariffs of up to 15% for 150 days to address balance-of-payments deficits. However, according to Thursday's complaint, this provision, which dates back to the Nixon administration, has never before been used to impose tariffs.

Beyond the lack of precedent, the complaint also argues that Trump conflated trade deficits with balance-of-payments deficits, failing to meet the prerequisite for invoking the provision. The complaint states: "Section 122 cannot be invoked merely because of a trade deficit, and the president has no authority to support his tariff policy with a misinterpretation of technical terms."

Additionally, the complaint argues that Trump's exemptions for certain goods (such as those meeting the rules of origin under the USMCA) exceed the authority of Section 122, which requires tariffs to be applied "broadly and uniformly." The plaintiff states also contend that Section 122 itself has become obsolete because it is tied to a fixed exchange rate system, which was replaced by floating exchange rates in 1976.

The complaint also references Trump's threat to raise the global tariff to 15%, which Treasury Secretary Scott Bessent has said could happen"within the week."The complaint states: "Just as with his unlawful use of IEEPA, the president is again exercising tariff powers he does not possess—invoking a law that does not authorize him to impose tariffs—to upend the constitutional order and bring chaos to the global economy."

Although the lawsuit distinguishes the repealed IEEPA tariffs from the Section 122 tariffs, Gregory Husisian, a partner at Foley & Lardner, cautioned that importers should not assume the Court of International Trade will side with the states. Husisian said in an email to Supply Chain Dive: "While a more reasonable interpretation might be that the law is being stretched beyond its legislative purpose, this argument is closer than the IEEPA tariffs—because IEEPA did not even list tariffs as a potential remedy."

The lawsuit comes as some clear progress has begun to emerge regarding refunds of IEEPA tariffs. On Wednesday, the Court of International Trade instructed Customs and Border Protection toliquidate unprocessed imported goodsand reliquidate goods that have been processed but not finally liquidated, "without regard" to the now-defunct tariffs.

Antone Gonsalves contributed to this article.