A libertarian organization backed by Leonard Leo and Charles Koch has initiated a legal challenge against Donald Trump’s tariff policies, signaling a growing rightwing dissent towards measures that have caused international markets to decline.
The New Civil Liberties Alliance has filed a lawsuit concerning Trump’s implementation of import tariffs on goods imported from China. They argue that the use of the International Emergency Economic Powers Act (IEEPA) – which the president has cited to support tariffs on virtually all nations – is illegal.
This lawsuit aligns with recent support from four Republican senators for a Democratic amendment calling for the repeal of the 25% tariffs on Canadian imports.
Last Wednesday, the amendment passed with backing from Mitch McConnell, the former Republican Senate majority leader, along with GOP senators Rand Paul, Susan Collins, and Lisa Murkowski, who contended that the tariffs on Canada could be detrimental to the economy.
The alliance’s actions could be particularly significant, especially considering its past financial support from Koch, a billionaire businessman, and Leo, a prominent legal activist who played a role in Trump’s appointment of three conservative justices to the Supreme Court during his first term, creating a 6-3 conservative majority. The group received funding from organizations linked to Leo and Koch in 2022. A representative for Stand Together, a Koch-funded group that has supported the alliance, stated it was not involved in the lawsuit.
The alliance has brought this lawsuit on behalf of Simplified, a Florida-based home goods company that significantly depends on imports from China. They contend that the president has overstepped his authority by invoking the IEEPA to impose tariffs.
“This statute authorizes specific emergency measures such as sanctions or asset freezes to safeguard the United States from foreign threats,” the alliance outlined in a statement. “It does not empower the president to levy tariffs. In its nearly 50-year history, no president – including Trump during his first term – has attempted to utilize the IEEPA for imposing tariffs.”
Additionally, the alliance argues that tariff imposition should fall under the purview of Congress, cautioning that Trump’s tariffs could infringe upon U.S. Supreme Court decisions.
“His effort to apply the IEEPA in this manner not only breaches the statute as written but also raises issues under the Supreme Court’s major questions doctrine, which alerts courts against interpreting laws that entail ‘vast economic and political significance’ without explicit congressional consent,” the statement noted.
Mark Chenoweth, the alliance’s president, stated that the court in Pensacola – where the lawsuit has been filed – must adhere to this legal precedent.
“Interpreting this law [IEEPA] broadly enough to sustain the China tariff would shift core legislative authority,” he emphasized. “To avoid such a non-delegation issue, the court must interpret the statute consistent with nearly 50 years of established practice, determining that it does not grant permission for tariff establishment.”
The lawsuit asserts that there is no correlation between the fentanyl crisis – which Trump has cited as a justification for invoking emergency powers – and the tariffs.
“The means of a broad-based tariff does not align with the objective of halting an influx of opioids, and is not in any way ‘necessary’ for that stated goal,” the complaint filed on behalf of Simplified claims.
“In reality, President Trump’s own comments reveal the true motive behind the China tariff: to diminish American trade deficits while increasing federal revenue.”
This legal action adds to the growing dissatisfaction regarding tariffs among some of Trump’s traditionally vocal supporters, such as billionaire hedge fund manager Bill Ackman.
Senator Paul, a vocal opponent of tariffs, mentioned in an interview with the Washington Post that other Republicans on Capitol Hill share his concerns.
“They are all monitoring the stock market and expressing worries,” Paul remarked. “However, they are maintaining a façade to suggest that everything is fine, hoping this issue will resolve itself.”
Endorsing last week’s Democratic amendment, spearheaded by Virginia senator Tim Kaine, Paul stated: “I’m indifferent to whether the president is a Republican or a Democrat. I do not wish to exist under emergency governance. I want my representatives to be able to articulate my views and maintain checks and balances on power.”
Trump criticized Paul and the three other Republican senators who supported the amendment, implying their actions were driven by “Trump derangement syndrome.”
In yet another indication of Republican apprehension, Iowa GOP senator Chuck Grassley, alongside Washington Democrat Maria Cantrell, has proposed legislation to restrict Trump’s authority to impose or raise tariffs without Congress’s approval within 60 days. The White House budget office indicated on Monday that Trump would veto this bill.
