Some two dozen states are challenging President Donald Trump's new global tariffs in court. On Thursday, the states filed a lawsuit over import taxes he imposed after a stinging loss at the Supreme Court. Democratic attorneys general leading the suit argue that Trump is overstepping his power with planned 15% tariffs on much of the world. Trump has said the tariffs are essential to address 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. The new suit argues that law was intended to be used only in specific, limited circumstances.

Central bankers from around the world have expressed full support for U.S. Federal Reserve Chair Jerome Powell. This comes after President Donald Trump escalated his confrontation with the Fed by threatening criminal charges. The central bankers, including European Central Bank President Christine Lagarde, emphasized the importance of central bank independence for economic stability. The dispute ostensibly centers on Powell's congressional testimony in June about renovation costs, but Trump has criticized Powell for not cutting rates faster. Economists warn that a politicized Fed could harm its credibility.

Among the threats tariffs pose to the U.S. economy, none may be as strange as the sell-off in the dollar. Currencies rise and fall all the time over inflation fears and other factors, but economists worry the dramatic dollar drop shows a loss of confidence in the U.S. as President Donald Trump tries to reshape global trade. If true, the blow could be big. The special status of the dollar as the medium of international trade and a safe haven has allowed the U.S. government, consumers and businesses to borrow at low rates even as debts have ballooned, which has helped speed economic growth.