On May 28, 2025, a three-judge panel of the U.S. Court of International Trade (“CIT”) held that all Trump administration tariff actions based on the International Emergency Economic Powers Act (“IEEPA”) are unconstitutional. The CIT’s decision is in response to two lawsuits – one filed on behalf of five small businesses and the other filed by a coalition of 12 states – and results in an injunction against the IEEPA tariffs.
In its opinion, the CIT held that the Trump administration exceeded the authority granted by IEEPA because 1) IEEPA does not “confer such unbounded authority” to “impose unlimited tariffs on goods from nearly every country in the world,” and 2) with respect to tariffs against Canada, Mexico, and China in response to opioid trafficking, the tariffs do not address the threats set forth in the respective executive orders.
Impacted Tariff Actions
As a reminder, the IEEPA tariffs at issue include:
- 25% tariffs against Canada to “address the flow of illicit drugs across the northern border,”
- 25% tariffs against Mexico to “address the situation at the southern border,”
- 20% tariffs against China to “address the synthetic opioid supply chain in China,”
- Universal tariffs of 10% all trading partners, and
- “Reciprocal” tariffs of variable rates announced on “Liberation Day” and currently subject to a 90-day pause set to expire on July 9.
Importantly, the CIT decision does not impact tariff actions based on other authorities, including Section 301 of the Trade Act of 1974 (“Section 301”) tariffs on Chinese-origin goods or Section 232 of the Trade Expansion Act of 1962 (“Section 232”) tariffs on aluminum, steel, automobiles, and automotive parts. The Section 301 tariffs are implemented against countries that engage in unfair trade practices that harm U.S. commerce, while Section 232 tariffs are implemented against goods determined by the Secretary of Commerce to impair U.S. national security. See table directly below.
Next Steps
The CIT decision requires the Trump administration to issue orders implementing the injunction within 10 days. But the administration has already filed an appeal with the U.S. Court of Appeals for the Federal Circuit, and we expect the administration to seek an emergency stay of the order during the appeals process.*
Even if the CIT injunction remains, the Trump administration may use other statutory authority to continue its tariff strategy. For example, the CIT points out that the “universal” and “reciprocal” tariffs, which respond to trade deficits with other countries, may be addressed by Section 122 of the Trade Act of 1974 (“Section 122”). Section 122 tariffs, however, are more limited in scope because they have a 15% cap and a maximum duration of 150 days. Additionally, the Trump administration may seek to impose tariffs on certain product groups under the national security authority of Section 232. The Department of Commerce has already initiated Section 232 investigations of copper, timber and lumber, semiconductors and semiconductor manufacturing equipment, pharmaceuticals and pharmaceutical ingredients, trucks, critical minerals, and commercial aircraft. Lastly, the Trump administration may seek to impose additional tariffs under Section 301, similar to the broad tariff actions against China imposed under the first Trump administration and continued during the Biden administration.
The current tariff landscape is quickly evolving, and we expect future developments, either from federal courts or executive action, to further clarify immediate impacts. The attorneys at Torres Trade Law are closely monitoring these developments. If you have any questions about the current tariff situation and impacts of the CIT ruling, please contact Torres Trade Law.
*Update: On May 29, 2025, the U.S. Court of Appeals for the Federal Circuit in Washington, DC granted the United States' request for an administrative stay of the Court of International Trade’s injunction until further notice.
