Maryland and the US capital sued President Donald Trump on Tuesday, saying he is breaking laws by raking in money from foreign governments and businesses at his luxury hotels and office towers.

The lawsuit said heavy spending by foreign diplomats and embassies at the Trump International Hotel just a few blocks from the White House, payments by foreign entities at his Trump Tower and Trump International Tower in New York, and other business operations effectively violate the US Constitution's ban on presidents enriching themselves while in office.

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"The suit alleges that president Trump is flagrantly violating the constitution, which explicitly bars presidents from receiving gifts or inducements from foreign or domestic government entities," said Washington Attorney General Karl Racine.

"Never in the history of this country have we had a president with these kinds of extensive business entanglements. Or a president who refused to adequately distance themselves from their holdings," Racine said.

The suit says that despite billionaire Trump having placed his extensive business holdings in a trust after he was elected president, he still owns the properties and is well- aware of the money they are earning him.

"Although he formed a trust to hold his business assets, he may obtain distributions from his trust at any time," it said.

The suit detailed the popularity of the opulent Trump International Hotel with foreign officials since his January 20 inauguration, alleging that the hotel "has specifically marketed itself to the diplomatic community."

It pointed to news reports of Asian and Middle Eastern diplomats saying they will go there to impress the president.

Kuwait held its national day celebration at the hotel, and Saudi Arabia has spent hundreds of thousands of dollars there, the suit claims.

In New York, Trump Tower leases space to the Chinese government-controlled bank ICBC and Trump World Tower and other properties also focus on foreign clients, including Russians, it said.

The suit also alleged that Trump benefits from foreign distribution payments for his "The Apprentice" reality TV show and generally from the international real estate projects of the Trump Organization.

Those benefits violate the US Constitution's "emoluments clauses", which ban US officials from taking gifts or other benefits from foreign governments, the suit argues.

"The emolument clauses are a firewall against presidential corruption," said Maryland Attorney General Brian Frosh.

"He's going to have to answer in court."

The focus on Trump International Hotel stems in part from businesses in Washington and Maryland, some partly owned by the local governments, complaining that its link to the president effectively gives it an unfair competitive advantage.

The lawsuit followed an earlier similar complaint by Citizens for Responsibility and Ethics in Washington, filed on January 23 in New York federal district court.

On Friday the Justice Department asked the court to drop that complaint, saying Citizens for Responsibility and Ethics in Washington had no grounds to sue because it had not experienced any loss in relation to Trump.

It also argued that the emoluments clause was never intended to target a president's private businesses, unconnected with his official office or actions.

"Were plaintiffs' interpretation correct, presidents from the very beginning of the republic, including George Washington, would have received prohibited 'emoluments,'" the department said.

Asked today about the lawsuits, White House spokesman Sean Spicer branded them political.

"It's not hard to conclude that partisan politics may be one of the motivations," he said