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By LINDSAY WHITEHURST and PAUL WISEMAN

WASHINGTON (AP) — Some two dozen states challenged President Donald Trump’s new global tariffs on Thursday, filing a lawsuit over import taxes he imposed after a stinging loss at the Supreme Court.

The Democratic attorneys general and governors in the lawsuit argue that Trump is overstepping his power with planned 15% tariffs on much of the world.

Trump has said the tariffs are essential to reduce America’s longstanding trade deficits. He imposed duties under Section 122 of the Trade Act of 1974 after the Supreme Court struck down tariffs he imposed last year under an emergency powers law.

Section 122, which has never been invoked, allows the president to impose tariffs of up to 15%. They are limited to five months unless extended by Congress.

The lawsuit is led by attorneys general from Oregon, Arizona, California and New York.

“The focus right now should be on paying people back, not doubling down on illegal tariffs,” said Oregon Attorney General Dan Rayfield. The suit comes a day after a judge ruled t hat companies who paid tariffs under Trump’s old framework should get refunds.

The new suit argues that Trump can’t pivot to Section 122 because it was intended to be used only in specific, limited circumstances — not for sweeping import taxes. It also contends the tariffs will drive up costs for states, businesses and consumers.

Many of those states also successfully sued over Trump’s tariffs imposed under a different law: the International Emergency Economic Powers Act (IEEPA).

Four days after the Supreme Court struck down his sweeping IEEPA tariffs Feb. 20, Trump invoked Section 122 to slap 10% tariffs on foreign goods. Treasury Secretary Scott Bessant told CNBC on Wednesday that the administration would raise the levies to the 15% limit this week.

The Democratic states and other critics say the president can’t use Section 122 as a replacement for the defunct tariffs to combat the trade deficit.

The Section 122 provision is aimed at what it calls “fundamental international payments problems.’’ At issue is whether that wording covers trade deficits, the gap between what the U.S. sells other countries and what it buys from them.

Section 122 arose from the financial crises that emerged in the 1960s and 1970s when the U.S. dollar was tied to gold. Other countries were dumping dollars in exchange for gold at a set rate, risking a collapse of the U.S. currency and chaos in financial markets. But the dollar is no longer linked to gold, so critics say Section 122 is obsolete.

Awkwardly for Trump, his own Justice Department argued in a court filing last year that the president needed to invoke the emergency powers act because Section 122 did “not have any obvious application’’ in fighting trade deficits, which it called “conceptually distinct’’ from balance-of-payment issues.

Still, some legal analysts say the Trump administration has a stronger case this time.

“The legal reality is that courts will likely provide President Trump substantially more deference regarding Section 122 than they did to his previous tariffs under IEEPA,’’ Peter Harrell, visiting scholar at Georgetown University’s Institute of International Economic Law, wrote in a commentary Wednesday.

The specialized Court of International Trade in New York, which will hear the states’ lawsuit, wrote last year in its own decision striking down the emergency-powers tariffs that Trump didn’t need them because Section 122 was available to combat trade deficits.

Trump does have other legal authorities he can use to impose tariffs, and some have already survived court tests. Duties that Trump imposed on Chinese imports during his first term under Section 301 of the same 1974 trade act are still in place.

Also joining the lawsuit are the attorneys general of Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Rhode Island, Vermont, Virginia, Washington, Wisconsin, and the governors of Kentucky and Pennsylvania.

By SUMAN NAISHADHAM and JOSEPH WILSON

MADRID (AP) — Spain’s Prime Minister Pedro Sánchez again criticized the U.S. and Israel’s military actions in Iran, standing firm on Wednesday against trade threats from Washington and warning that the war in the Middle East risked “playing Russian roulette” with millions of lives.

“We are not going to be complicit in something that is bad for the world and is also contrary to our values ​​and interests, just out of fear of reprisals from someone,” Sánchez said in a televised address.

President Donald Trump on Tuesday threatened to end U.S. trade with Spain because of Spain’s refusal to allow the U.S. to use joint military bases in the country in its attacks on Iran.

Sánchez has called the U.S. and Israeli attacks on Iran an “unjustifiable” and “dangerous” military intervention.

It’s not clear how Trump would cut off trade with Spain, which is a member of the European Union. The EU negotiates trade on behalf of all its 27 member states.

On Wednesday, Sánchez expressed concern that the attacks on Iran could lead to another costly military quagmire in the Middle East, similar to the past American interventions in Iraq and Afghanistan.

“In short, the position of the government of Spain can be summarized in four words,” Sánchez said. “No to the war.”

The EU said Wednesday it would protect its interests and work to stabilize its trade relationship with the U.S, with which it struck a trade deal last year after months of economic uncertainty over Trump’s tariff blitz.

“We stand in full solidarity with all member states and all its citizens and, through our common trade policy, stand ready to act if necessary to safeguard EU interests,” said European Commission spokesperson Olof Gill.

After Spain denied U.S. use of its bases, Trump on Tuesday said “we could use their base if we want,” referencing the Rota and Morón installations in southern Spain that the U.S. and Spain share, but which remain under Spanish command. “We could just fly in and use it,” Trump said. “Nobody’s going to tell us not to use it, but we don’t have to.”

Tuesday’s threats from Washington were just the latest instance of the U.S. president wielding the threat of tariffs or trade embargoes as punishment. The U.S. Supreme Court last month struck down Trump’s far-reaching global tariffs, saying emergency powers do not allow the president to unilaterally impose sweeping tariffs.

However, Trump maintains that the court allows him to instead impose full-scale embargoes on other nations of his choosing.

Spain has not had any direct contact with the U.S. since Trump’s criticisms, Economy Minister Carlos Cuerpo said Wednesday.

“I want to send a message of calm,” Cuerpo told Spanish radio station Cadena Ser. “Beyond those comments (by Trump), there have not been any more moves (by the U.S.).”

Spain’s main business groups expressed concerns over the U.S. trade threat, calling the U.S. a “key partner from an economic and political standpoint.”

“We trust that our trade relations will ultimately not be affected in any way,” the Spanish business chambers CEOE, CEPYME and ATA said Tuesday.

Last year, Spain’s central bank issued a report that concluded Europe’s fourth-largest economy was relatively cushioned compared to the EU average when it came to exposure to tariffs by Trump.

Spain’s exports and imports with the U.S. accounted for 4.4% of GDP, the Bank of Spain said, while trade with the U.S. for the EU as a whole was 10.1%.

Exports of Spanish goods to the U.S. accounted for 1% of Spain’s GDP, or $18.6 billion, making it Spain’s sixth largest export market for goods, the bank concluded. The Southern European nation’s main exports to the U.S. include pharmaceutical products, olive oil refined gas and electrical transformers, according to the Observatory of Economic Complexity.

Spain’s position on the Iran conflict is the latest flare-up in its relationship with the Trump administration.

Spain was an outspoken critic of Israel’s war in Gaza and attracted Trump’s ire last year when it backed out of NATO’s pledge to increase defense spending by members to 5% of GDP. At the time, Spain said it could meet its estimated defense needs by spending less — just 2.1% of its GDP — a move that Trump roundly criticized and also threatened with tariffs in response.

Wilson reported from Barcelona. Associated Press journalist Sam McNeil in Brussels contributed to this report.

By Darius Tahir, Lauren Sausser, KFF Health News

It’s the rare policy question that unites Republican Gov. Ron DeSantis of Florida and the Democratic-led Maryland government against President Donald Trump and Gov. Gavin Newsom of California: How should health insurers use AI?

Regulating artificial intelligence, especially its use by health insurers, is becoming a politically divisive topic, and it’s scrambling traditional partisan lines.

Boosters, led by Trump, are not only pushing its integration into government, as in Medicare’s experiment using AI in prior authorization, but also trying to stop others from building curbs and guardrails. A December executive order seeks to preempt most state efforts to govern AI, describing “a race with adversaries for supremacy” in a new “technological revolution.”

“To win, United States AI companies must be free to innovate without cumbersome regulation,” Trump’s order said. “But excessive State regulation thwarts this imperative.”

Across the nation, states are in revolt. At least four — Arizona, Maryland, Nebraska, and Texas — enacted legislation last year reining in the use of AI in health insurance. Two others, Illinois and California, enacted bills the year before.

Legislators in Rhode Island plan to try again this year after a bill requiring regulators to collect data on technology use failed to clear both chambers last year. A bill in North Carolina requiring insurers not to use AI as the sole basis of a coverage decision attracted significant interest from Republican legislators last year.

DeSantis, a former GOP presidential candidate, has rolled out an “AI Bill of Rights,” whose provisions include restrictions on its use in processing insurance claims and a requirement allowing a state regulatory body to inspect algorithms.

“We have a responsibility to ensure that new technologies develop in ways that are moral and ethical, in ways that reinforce our American values, not in ways that erode them,” DeSantis said during his State of the State address in January.

Ripe for Regulation

Polling shows Americans are skeptical of AI. A December poll from Fox News found 63% of voters describe themselves as “very” or “extremely” concerned about artificial intelligence, including majorities across the political spectrum. Nearly two-thirds of Democrats and just over 3 in 5 Republicans said they had qualms about AI.

Health insurers’ tactics to hold down costs also trouble the public; a January poll from KFF found widespread discontent over issues like prior authorization. (KFF is a health information nonprofit that includes KFF Health News.) Reporting from ProPublica and other news outlets in recent years has highlighted the use of algorithms to rapidly deny insurance claims or prior authorization requests, apparently with little review by a doctor.

Last month, the House Ways and Means Committee hauled in executives from Cigna, UnitedHealth Group, and other major health insurers to address concerns about affordability. When pressed, the executives either denied or avoided talking about using the most advanced technology to reject authorization requests or toss out claims.

AI is “never used for a denial,” Cigna CEO David Cordani told lawmakers. Like others in the health insurance industry, the company is being sued for its methods of denying claims, as spotlighted by ProPublica. Cigna spokesperson Justine Sessions said the company’s claims-denial process “is not powered by AI.”

Indeed, companies are at pains to frame AI as a loyal servant. Optum, part of health giant UnitedHealth Group, announced Feb. 4 that it was rolling out tech-powered prior authorization, with plenty of mentions of speedier approvals.

“We’re transforming the prior authorization process to address the friction it causes,” John Kontor, a senior vice president at Optum, said in a press release.

Still, Alex Bores, a computer scientist and New York Assembly member prominent in the state’s legislative debate over AI, which culminated in a comprehensive bill governing the technology, said AI is a natural field to regulate.

“So many people already find the answers that they’re getting from their insurance companies to be inscrutable,” said Bores, a Democrat who is running for Congress. “Adding in a layer that cannot by its nature explain itself doesn’t seem like it’ll be helpful there.”

At least some people in medicine — doctors, for example — are cheering legislators and regulators on. The American Medical Association “supports state regulations seeking greater accountability and transparency from commercial health insurers that use AI and machine learning tools to review prior authorization requests,” said John Whyte, the organization’s CEO.

Whyte said insurers already use AI and “doctors still face delayed patient care, opaque insurer decisions, inconsistent authorization rules, and crushing administrative work.”

Insurers Push Back

With legislation approved or pending in at least nine states, it’s unclear how much of an effect the state laws will have, said University of Minnesota law professor Daniel Schwarcz. States can’t regulate “self-insured” plans, which are used by many employers; only the federal government has that power.

But there are deeper issues, Schwarcz said: Most of the state legislation he’s seen would require a human to sign off on any decision proposed by AI but doesn’t specify what that means.

The laws don’t offer a clear framework for understanding how much review is enough, and over time humans tend to become a little lazy and simply sign off on any suggestions by a computer, he said.

Still, insurers view the spate of bills as a problem. “Broadly speaking, regulatory burden is real,” said Dan Jones, senior vice president for federal affairs at the Alliance of Community Health Plans, a trade group for some nonprofit health insurers. If insurers spend more time working through a patchwork of state and federal laws, he continued, that means “less time that can be spent and invested into what we’re intended to be doing, which is focusing on making sure that patients are getting the right access to care.”

Linda Ujifusa, a Democratic state senator in Rhode Island, said insurers came out last year against the bill she sponsored to restrict AI use in coverage denials. It passed in one chamber, though not the other.

“There’s tremendous opposition” to anything that regulates tactics such as prior authorization, she said, and “tremendous opposition” to identifying intermediaries such as private insurers or pharmacy benefit managers “as a problem.”

In a letter criticizing the bill, AHIP, an insurer trade group, advocated for “balanced policies that promote innovation while protecting patients.”

“Health plans recognize that AI has the potential to drive better health care outcomes — enhancing patient experience, closing gaps in care, accelerating innovation, and reducing administrative burden and costs to improve the focus on patient care,” Chris Bond, an AHIP spokesperson, told KFF Health News. And, he continued, they need a “consistent, national approach anchored in a comprehensive federal AI policy framework.”

Seeking Balance

In California, Newsom has signed some laws regulating AI, including one requiring health insurers to ensure their algorithms are fairly and equitably applied. But the Democratic governor has vetoed others with a broader approach, such as a bill including more mandates about how the technology must work and requirements to disclose its use to regulators, clinicians, and patients upon request.

Chris Micheli, a Sacramento-based lobbyist, said the governor likely wants to ensure the state budget — consistently powered by outsize stock market gains, especially from tech companies — stays flush. That necessitates balance.

Newsom is trying to “ensure that financial spigot continues, and at the same time ensure that there are some protections for California consumers,” he said. He added insurers believe they’re subject to a welter of regulations already.

The Trump administration seems persuaded. The president’s recent executive order proposed to sue and restrict certain federal funding for any state that enacts what it characterized as “excessive” state regulation — with some exceptions, including for policies that protect children.

That order is possibly unconstitutional, said Carmel Shachar, a health policy scholar at Harvard Law School. The source of preemption authority is generally Congress, she said, and federal lawmakers twice took up, but ultimately declined to pass, a provision barring states from regulating AI.

“Based on our previous understanding of federalism and the balance of powers between Congress and the executive, a challenge here would be very likely to succeed,” Shachar said.

Some lawmakers view Trump’s order skeptically at best, noting the administration has been removing guardrails, and preventing others from erecting them, to an extreme degree.

“There isn’t really a question of, should it be federal or should it be state right now?” Bores said. “The question is, should it be state or not at all?”

©2026 KFF Health News. Distributed by Tribune Content Agency, LLC.

Matthew Nix had driven past the brewery in Sauganash for years, but — not much of a weekday drinker — had never stopped in.

When he finally decided to meet friends at the taproom on a recent Saturday to play some cards, he found bartenders dancing on countertops, dogs wearing sweaters and the last of the beer draining from the tap. It was the farewell party for Alarmist Brewing.

“This is my first time here, first and obviously last,” said Nix, 36, a high school teacher living in the Edgewater neighborhood, about the closure.

In Illinois and across the country, breweries have been struggling as consumers seek healthier drinking habits or have a wider range of options, such as THC-infused drinks, as business costs continue to rise. Many have closed their doors, while others have redefined its meaning as a social space that offers beverage variety and events.

In Chicago alone, a handful of breweries have closed or consolidated in recent years, including Metropolitan Brewing, Revolution Brewing Brewpub and Lo Rez Brewing and Taproom. 

The number of U.S breweries closing outpaced those that opened for the second year in a row in 2025 for a net loss of 179 last year, according to preliminary 2025 data from Brewers Association, a trade group for small American brewers.

It stands in stark contrast from a decade ago — a golden age — for craft brewers when the number of breweries opening was about 10 times higher than those closing, according to Matt Gacioch, staff economist at Brewers Association.

One industry challenge is that Americans are now drinking less. A 2025 Gallup poll showed that only 54% of U.S. adults said they consume alcohol — the lowest percentage in 90 years. 

Figures are even lower among young adults with only 50% reporting that they drink alcohol. These numbers fall in line with healthier drinking trends like “sober curious” and “Dry January,” which seek mindful and moderate drinking.

On top of drinking less, consumers are also seeking wider beverage options from nonalcoholic drinks to hard seltzers, which adds pressure for traditional craft breweries specializing in beer.

Sports and music arena United Center is expected to start selling THC-infused drinks Señorita and Rythm at its stands this month — apparently the largest U.S. arena to do so. 

“Bringing Señorita and Rythm to the United Center reflects a simple truth: Consumers want nonalcoholic options, and leading venues are responding,” Ben Kovler, Rythm, Inc. chairman and interim CEO, said in a statement last month.

Other music venues that sell cannabis-derived drinks are the Salt Shed, Riviera, Ramova Theatre and Thalia Hall, taking up coveted beverage shelf space.

“There’s just so much more competition in terms of consumer attention and physical retail space,” Gacioch said. “There’s this whole world of other options.” 

Rising business expenses and the cost of goods like aluminum have also contributed to the strain, particularly after the pandemic.

“You have the increased cost of just about everything,” said Andrew Heritage, chief economist at the Beer Institute, noting the increase in operating costs, rent and labor. 

Some Chicago breweries were unable to recover, with Lo Rez Brewing in the Pilsen neighborhood closing its doors in 2023 in what cofounder Dave Dahl called a “pandemic casualty.” Another staple in the craft industry, Metropolitan Brewing, one of Chicago’s oldest, closed in 2023 after filing for Chapter 11 bankruptcy.

Most recently, award-winning Alarmist Brewing closed on Feb. 1 after years of struggling with falling business after the pandemic.

“The bottom line is we’re just not selling,” said Alarmist owner Gary Gulley. “It just never recovered since COVID.”

Illinois lost over 30 breweries in two years after 2020, falling to 218 total breweries, according to data from the Beer Institute. By 2024, the number of Illinois breweries rebounded to 251.

Some breweries have adapted to create third spaces, a place to mingle and play trivia with friends — and pups.

“I like a place where you can bring your dog, you can bring a book,” Nix said, likening these breweries to social spaces where you can play card games. 

One brewery that has been bolstering events and activities is Maplewood Brewery and Distillery in the Logan Square neighborhood. The decade-old brewery holds events like its upcoming Pulaski Day Party to celebrate its Pulaski pilsner, trivia nights and beer festivals to cultivate brand loyalty.

“We have our core brand that we make, but we’re always coming out with something new and fun … that’s helped us out,” said Paul Megalis, co-owner and CFO of Maplewood Brewery.

Their expansive beverage options include ready-to-drink rum punch cocktails, in-house coffee liqueurs for espresso martini lovers and seasonal beer concoctions. 

“We’ve essentially been a beverage company since Day 1, and so we’ve always had a diversified portfolio. I mean, we just hustle,” Megalis said.

They plan to open a second location in Glen Ellyn slated for this spring.

Despite the changing tides in the craft beer business, experts believe craft breweries are evolving not disappearing.

“Craft beer industry is nothing if not creative,” Gacioch said.