Attorney General Kris Mayes challenges tariffs

By Howard Fischer
Capitol Media Services
PHOENIX -- Attorney General Kris Mayes wants the U.S. Court of International Trade to strike down as illegal the host of international tariffs imposed by President Trump.
In new filings Wednesday, Mayes along with counterparts in other states acknowledges there are situations in which a president can impose tariffs on an emergency basis. But she said these are for limited reasons and must, by law, be of limited duration.
By contrast, Mayes said, the president has simply declared that the trade imbalance with other countries -- the fact that we buy more from them than we sell to them -- justifies imposing tariffs that start at 10% and go up from them.
"These edicts reflect a national trade policy that now hinges on the president's whims rather than the sound exercise of his lawful authority,'' the lawsuit says. "By claiming the authority to impose immense and ever-changing tariffs on whatever goods entering the United States he chooses, for whatever reason he finds convenient to declare an emergency, the president has upended the constitutional order and brought chaos to the American economy.''
The lawsuit also takes a separate swat at the excuse the president gave for specific tariffs on products from Mexico, Canada and China: that they were involved in the smuggling of drugs and migrants into the United States. It says there is no rationale between those claims and simply tacking what amounts to a surcharge on the price of items from those countries to U.S. customers.
Mayes, who is co-leading the lawsuit with Dan Rayfield, the attorney general of Oregon, said this is more than an argument over presidential powers.
She said the Arizona Department of Transportation has contracts to buy many pieces of equipment, parts and supplies, many of which are imported from other countries.
"The tariffs are already increasing costs for ADOT,'' the lawsuit states. That includes one contractor seeking a price increase citing the higher tariffs.
Mayes also said that state universities doing research also are likely to be affected because of "specialized equipment not available from domestic sources.''
She specifically cited the SHIELD USA, short for Substrate-based Heterogeneous Integration Leadership Demonstration. That is described as technology that allows for seamless assembly of multiple semiconductor chips, with her office saying that there is no commercial capacity for this technology existing now in the United States.
Mayes said the tariffs on this project alone potentially will increase costs by $1.4 million.
But the effects, the challengers say, will be much broader, saying that even studies done by the administration conclude that 95% of the cost of the tariffs -- essentially a tax on imports -- will be paid by individuals and companies here.
"The tariffs will depress Americans' wages by slowing economic growth, increasing unemployment, and raising inflation,'' the attorneys general said. "And instead of reducing threat to Americans' consumption levels, the tariffs will make the goods that Americans (and the plaintiff states) depend on more expensive and scarce.''
Cost issues aside, the lawsuit asks the court to declare that there's no legal basis for what the president is doing.
"The Constitution assigns to Congress, not the president, the power to lay and collect taxes, duties imports and excises,'' it says.
Mayes and her colleagues agreed that Congress did give the president the power to negotiate with other countries -- but specifically to reduce our own tariffs in exchange for similar actions by other countries. There also is authority to act when another country acts in a manner that injures domestic industry.
And the president can act when other countries "dump'' their products on the U.S. at artificially low. But even then, that is limited to 150 days.
"None of these prerequisites to impose congressionally authorized tariff has been met,'' the challenging state are telling the judges.
What that leaves is the president's claim that he can do what he's doing under the International Emergency Economic Powers Act. But the challenging states say that's not what that law allows.
According to Mayes and her counterparts, that 1977 law allows the president to regulate imports and exports in certain non-wartime emergencies -- but only that it has to be `an unusual and extraordinary threat.'' What he has done, they say, does not fit within that.
It starts with the fact that the tariffs are based largely on the trade deficit between the United States and other countries. Even Trump's Worldwide Tariff Order issued on April 2 -- what he dubbed "Liberation Day'' -- acknowledges that the deficit are "persistent.''
"Thus, by definition, they are not 'unusual or extraordinary,' '' the lawsuit states. "The United States has run a persistent trade deficit in goods since the 1970s.''
The litigation also says there is no evidence, as claimed by Trump, that the economic policies of other countries "suppress domestic wages and consumption.''
And then there's what the challengers say is the arbitrary nature of the tariffs, which start at 10%.
"The Worldwide Tariff Orders even impose tariffs on places that are not involved in international trade,'' the lawsuit says. That ranges from the military base on the Indian Ocean island of Diego Garcia to the Heard and McDonald Islands -- about 2,500 miles southwest of Australia -- which is home to only penguins and no humans.
The bottom line, according to the challengers, comes down to the fact that nothing in this has to do with dealing with actions by other countries or even dumping but simply the fact that consumers and companies in the United States buy more from many other countries than their residents purchase from U.S. firms.
"The country-by-country tariff rates are based on what the administration claims are an estimate of `tariff and non-tariff barriers,' '' the lawsuit says.
"But (they) are in fact a simple ratio of the trade deficit in foods as a percentage of total U.S. imports from the country arbitrarily subject to the tariff,'' it continues. "The administration's chosen formula is not an accepted methodology for calculating trade barriers and has no basis in economic theory.''
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