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Your guide to what Trump’s second term means for Washington, business and the world
For the past year, US President Donald Trump’s relentless campaign to shrink the federal government and concentrate power in his own hands has met at best ineffective resistance in Washington.
But investors should not assume that Trump and his deregulatory agenda are getting a free ride. State attorneys-general are joining forces to challenge the administration’s most controversial actions and prevent big business from taking advantage of their citizens.
Take Oregon’s Dan Rayfield.
Since his 2024 election, the Democrat has prioritised areas where he believes the Trump administration has got it wrong. The state is spearheading the Supreme Court case challenging Trump’s use of emergency tariff powers, as well as lawsuits to prevent the president from defunding the Consumer Financial Protection Bureau and sending the national guard into Portland. It has also joined dozens of suits led by other states.
“When one portion of the government starts taking police off the road, you then have to look at the other subdivisions of government and say, OK, who is going to fill the vacuum? People need [enforcers] looking after them,” Rayfield says.
The US has a long history of ambitious, activist attorneys-general. Political wags often quip that AG stands for aspiring governor. Mississippi’s Mike Moore led efforts in the 1990s to hold Big Tobacco accountable for the costs of smoking-related illnesses, while New York’s Eliot Spitzer took on Wall Street’s conflicts of interest in the early 2000s.
More recently, Texas’s Ken Paxton has led a Republican drive to punish corporate efforts to boost diversity and address climate change, while also bringing one of the first ever cases against misleading use of artificial intelligence.
But Trump’s return to the White House last year has stepped the conflict up significantly, sparking dozens of multi-state lawsuits to prevent him from cutting federal funding or changing policy.
State AGs have already filed or intervened collectively in 64 cases, putting them on pace to shatter the record of 160 AG vs federal cases filed during the first Trump administration, says Paul Nolette, a Marquette University political scientist.
The AGs have also made clear they intend to keep pressure on companies on issues such as consumer protection, artificial intelligence and antitrust enforcement, even as federal watchdogs have backed off.
When Trump temporarily paused enforcement of the Foreign Corrupt Practices Act, California’s Rob Bonta publicly reminded companies that bribing overseas officials remains illegal and can be prosecuted under California laws against unfair competition.
Colorado is leading efforts to stop Hewlett Packard Enterprise’s $14bn acquisition of Juniper Networks even though Trump’s justice department abruptly settled a challenge to the deal.
In Oregon, Rayfield received extra money from his state legislature to double the number of lawyers working on consumer protection issues. That allowed the state to wade into areas where he believes more enforcement is needed, such as cryptocurrency.
In April, Oregon sued Coinbase, alleging it had violated the state’s securities law. Rayfield’s lawyers are also going through consumer finance cases that Trump’s appointees to the CFPB have dropped to see if they should be refiled under Oregon laws.
“What we are seeing is federalism at work. In general, having both state and federal law enforcement is healthy for America,” says Rebecca Furdek, a partner at law firm Husch Blackwell.
It is not clear whether the direct challenges to Trump’s policies will ultimately succeed. Rayfield’s office estimates that multistate lawsuits have stopped the cancellation of $4.5bn in federal funds for Oregon alone and legal observers think his tariff challenge has a strong chance of victory in the Supreme Court. But other AG cases may face an uphill battle because the high court’s conservative majority has thus far granted Trump wide latitude.
Either way, stepped up state enforcement is almost certainly here to stay. High-profile cases against big companies not only score political points, but also can lead to huge settlements, so they more than pay for the extra staffing they require. Large companies seeking to do business in the US can no longer afford to focus all of their lobbying and regulatory efforts at the federal level.
“We have seen a sea change,” says William Ridgway, partner at Skadden Arps. “This is going to outlast the current administration.”