Rightwing group backed by Koch and Leo sues to stop Trump tariffs

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A libertarian group that has been funded by Leonard Leo and Charles Koch has mounted a legal challenge against Donald Trump's tariff regime, in a sign of spreading rightwing opposition to a policy that has sent international markets plummeting.

The New Civil Liberties Alliance filed a suit against Trump's imposition of import tariffs on exports from China, arguing that doing so under the International Emergency Economic Powers Act (IEEPA) - which the president has invoked to justify the duties on nearly all countries - is unlawful.

The group's actions echo support given by four Republican senators last week for a Democratic amendment calling for the reversal of 25% tariffs imposed on Canada.

Last Wednesday's amendment passed with the support of Mitch McConnell, the former Republican Senate majority leader, and his fellow GOP members Rand Paul, Susan Collins and Lisa Murkowski, who argued that tariffs on Canada would be economically harmful.

The action from the alliance has the potential to be even more emblematic, given its past backing from Koch, a billionaire industrialist, and Leo, a wealthy legal activist who advised Trump on the nomination of three conservative supreme court justices during his first presidency, which has given the court a 6-3 rightwing majority. The group received money from organisations affiliated with Leo and Koch in 2022. A spokesperson for Stand Together, a group partially funded by Koch and that has supported the alliance, said it was not involved in the legal case.

The alliance has tabled its action on behalf of Simplified, a Florida-based home goods company whose business is heavily reliant on imports from China. It argues that the president has exceeded his powers in invoking the IEEPA to justify tariffs.

"This statute authorizes specific emergency actions like imposing sanctions or freezing assets to protect the United States from foreign threats," the alliance said in a statement. "It does not authorize the president to impose tariffs. In its nearly 50-year history, no other president - including President Trump in his first term - has ever tried to use the IEEPA to impose tariffs."

The alliance also argues that power to impose tariffs lies not with a sitting president, but with Congress, and warns that those imposed by Trump could run afoul of US supreme court rulings.

"His attempt to use the IEEPA this way not only violates the law as written, but it also invites application of the supreme court's major questions doctrine, which tells courts not to discern policies of 'vast economic and political significance' in a law without explicit congressional authorization," its statement said.

Mark Chenoweth, the alliance's president, said the court in Pensacola - where the suit has been filed - would have to observe this legal precedent.

"Reading this law [IEEPA] broadly enough to uphold the China tariff would transfer core legislative power," he said. "To avoid that non-delegation pitfall, the court must construe the statute consistent with nearly 50 years of unbroken practice and decide it does not permit tariff setting."

The suit argues that there is no connection between the fentanyl epidemic - which Trump has cited as a reason for invoking the emergency powers - and the tariffs.

"The means of an across-the-board tariff does not fit the end of stopping an influx of opioids, and is in no sense 'necessary' to that stated purpose," the complaint filed on behalf of Simplified argues.

"In fact, President Trump's own statements reveal the real reason for the China tariff, which is to reduce American trade deficits while raising federal revenue."

The legal case adds to rumbling disquiet on tariffs among some of Trump's usually vocal supporters, including the billionaire hedge fund manager Bill Ackman.

Paul, a senator from Kentucky who has been one of the most consistent congressional anti-tariff voices, told the Washington Post that other Capitol Hill Republicans shared his concern.

"They all see the stock market, and they're all worried about it," Paul said. "But they are putting on a stiff upper lip to try to act as if nothing's happening and hoping it goes away."

Speaking in support of last week's Democratic amendment, sponsored by the Virginia senator Tim Kaine, Paul said: "I don't care if the president is a Republican or a Democrat. I don't want to live under emergency rule. I don't want to live where my representatives cannot speak for me and have a check and balance on power."

Trump attacked Paul and the three other Republican senators who backed the amendment and suggested they were driven by "Trump derangement syndrome".

In another sign of Republican concern, the GOP senator from Iowa Chuck Grassley - along with a Washington Democrat, Maria Cantwell - introduced a bill that would limit Trump's ability to impose or increase tariffs by requiring Congress to approve them within 60 days. The White House budget office said on Monday that Trump would veto the bill.