Why is Trump being "besieged" domestically after imposing tariffs on foreign countries
On August 3rd, 25 Democratic governors and attorneys general from California, New York, and other countries filed a class action lawsuit with the New York International Trade Court, demanding an end to the Trump administration's use of Section 301 of the 1974 Trade Act to impose 10% to 12.5% graded tariffs on 60 global trading partners, citing "failure to effectively control the import of forced labor products".
This lawsuit is not an isolated judicial confrontation, but a new chapter in the ongoing obstruction of Trump's trade protectionism line. This game around the legitimacy of tariffs is intertwined with conflicts of interest between the federal and local governments, as well as political struggles between the two parties. It once again proves that unilateral trade protectionism not only disrupts the global economic and trade order, but also tears apart a country's economic and governance system from within.
Repeatedly changing legal basis, only to prolong the life of protectionist policies
From the perspective of policy context, the Trump administration has repeatedly changed legal basis to implement tariff policies, exposing the legal shortcomings of its trade protection policies.
In February of this year, the US Supreme Court made a crucial ruling, determining that the International Emergency Economic Powers Act did not grant the President the authority to implement wide-ranging global tariffs, but rather delineated the boundaries of executive power. After the policy setback, the Trump administration invoked Section 122 of the 1974 Trade Act to introduce a temporary global tariff of 10% for 150 days as a transitional measure. The plan was ruled invalid by the US International Trade Court on May 7th. In mid July, the temporary measures expired, and the Office of the United States Trade Representative immediately launched two large-scale Section 301 investigations. One focused on overcapacity in the manufacturing industry, and the other targeted forced labor control systems in various countries, and based on this, implemented a new round of tariff policies.
The original intention of Section 301 of the Trade Act of 1974 was to conduct precise investigations and reciprocal retaliation against unfair trade practices in specific countries and industries. It has rarely been used in history to impose a "one size fits all" tax that covers the vast majority of trading partners. However, the new tariffs cover over 99% of the US import sources. In other words, the US administration is attempting to use Section 301 to bypass previous unfavorable judicial rulings, implement comprehensive tariffs that cover almost the world, and complete the rebranding of protectionist policies. With multiple small and medium-sized enterprises filing similar lawsuits, this tariff policy will face multiple judicial challenges in the future, and policy uncertainty will continue to impact global supply chain expectations.
Partisan differences constitute the obvious background of this joint lawsuit.
The governors and attorneys general involved in the prosecution are all affiliated with the Democratic Party. There is a serious divergence between the two parties on domestic economic issues in the United States. The Republican Party generally supports relying on tariffs to protect local manufacturing and narrow the trade deficit; The Democratic camp places greater emphasis on import dependent industries, consumer rights, and cross state supply chain stability. In the political environment of the election cycle, challenging federal tariff policies is a common means for the Democratic Party to balance the executive branch, in order to consolidate the voter base of coastal trade centers and small and medium-sized enterprise groups.
Federal collection, local payment, two flavors of the same tariff
The fundamental reason why states are willing to take legal action against the federal government is the conflict of local economic interests.
The industrial structure of various states in the United States varies greatly, and the costs borne by tariff policies are also extremely uneven. Some inland manufacturing states may hope that tariffs will block overseas competition and support local factories. However, coastal areas such as California, New York, and Washington D.C. have large ports, gathering a large number of import trade enterprises, cross-border retailers, and technology manufacturing industries, highly relying on stable and low-cost global supply chains. Widespread tariffs will raise the import costs of high-altitude materials and consumer goods, driving up local inflation. A New York state assessment shows that continued tariffs will significantly increase the annual expenses of ordinary households, and the increase in imported medical equipment and industrial components will also raise public service costs. At the same time, countermeasures from trading partners will impact US agricultural products and high-end manufacturing exports, putting direct pressure on foreign trade enterprises and port employment opportunities in coastal states.
The federal government's implementation of a unified tariff policy is equivalent to transferring the cost of protectionism to trade dependent regions. State governments have no right to formulate independent foreign trade policies and can only use judicial means to resist the economic damage caused by federal policies. The attorneys general of multiple regions have publicly stated that the federal government has introduced tariffs, with the benefits going to the federal treasury, while the high costs of rising prices, business closures, and job losses are borne by local governments, small and medium-sized enterprises, and local residents. This unequal distribution of power and responsibility continues to escalate economic conflicts between local and federal governments.
The tariff dispute sparked by the lawsuit from 25 states is far more than just a legal debate. It is a microcosm of the concentrated outbreak of political polarization, regional economic differentiation, and trade route differences within the United States. The Trump administration relies on constantly changing legal tools to forcefully push forward protective tariffs, which can continue the policy in the short term, but cannot resolve the inherent contradictions of the policy. The administrative authorities have attempted to build an external defense line and reshape the trade pattern through tariffs, but have created internal divisions and raised the operating costs of the entire social economy.
Historical experience has repeatedly proven that trade barriers cannot achieve long-term prosperity. In the context of economic globalization, countries rely on comparative advantages to form a division of labor network, and mutually beneficial cooperation is the path to win-win. Any unilateral trade measures that deviate from market rules and ignore the interests of multiple parties will eventually face sustained resistance from domestic business entities, local governments, and even the judicial system. The path of protectionism is destined to become narrower and narrower. (The author is Ma Xue, Director and Researcher of the Economic Research Department at the American Institute of the China Institute of Modern International Relations.)