America's largest state for manufacturing is by many measures, California, and that state is suing, saying President Trump's new tariffs are illegal.

I'm David Brancaccio in Los Angeles. California is suing the Trump administration over his sweeping tariffs.

The state says the executive branch lacks the constitutional authority to enact them. The lawsuit is the most significant legal challenge yet to the Trump tariffs. Only some of those were put on hold by the administration. The tariff back and forth is knocked financial markets for several loops and increased talk of recession. Marketplace's Nova Safo is here with more.

You know, David, California is laying out what amounts to a conservative legal challenge over Trump's tariff policies, and this is over a legal theory the Supreme Court under Roberts

has championed. The theory is called the Major Questions Doctrine, and the idea is that if the

executive branch wants to decide an issue of

major national significance, it needs congressional authorization. Here's California's Governor

Gavin Newsom making the case. I would just highlight just two of the specific examples the Supreme

Court used as it relates to the major questions doctrine on the issue of student loans under the Biden administration, on the clean power plan under the Obama administration.

If they are consistent, then this lawsuit is a lock.

Because he said the tariffs impact the economy in California in such a profound way.

I also heard the governor say that California is the biggest

manufacturing state? Surprise me a little. Yeah, he did say that. He was talking about the value of

output. He mentioned invidia in Silicon Valley. So officials are trying to assert that they have

standing to sue, and they are trying to highlight the major economic impacts of the tariffs,

something that again goes to proving the relevance of the major questions doctrine.

Now, while the state is asserting that this is a slam dunk, as the governor said, the White House says it believes it is on solid ground on the basis that the tariffs are dealing with a national emergency.

And that's something Congress has authorized, according to the White House.

Now, that's an interpretation that courts will have to resolve as well, David.

All right, Nova Safa, thank you.

The Chair of America's Central Bank, Jerome Powell, indicated yesterday he's in wait and C mode after responding to the effect of tariffs with higher or lower interest rates.

He's not at the moment.

...