On May 28, 2025, a three judge panel of the Court of International Trade (the “CIT”) blocked President Trump’s sweeping reciprocal tariffs against nearly every country in the world as well as the tariffs imposed against Mexico, Canada, and China to combat fentanyl trafficking. The CIT found that the International Emergency Economic Powers Act of 1977 (“IEEPA”), which President Trump invoked to impose these tariffs, does not confer such “unbounded authority” to the President. The CIT reasoned that an unlimited delegation of tariff authority would be unconstitutional, and that Congress enacted IEEPA with the intent of limiting presidential power over international economic transactions. The CIT concluded that (1) the worldwide reciprocal tariffs exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs; and (2) the tariffs imposed to combat fentanyl trafficking do not “deal with” the threats set forth in those executive orders as required by IEEPA. Accordingly, the CIT issued an Order invalidating and permanently enjoining the related executive orders, including Executive Orders 14193, 14194, 14195, 14257, and all related modifications and amendments. The Order further requires the necessary administrative orders to effectuate the CIT’s ruling to be issued within 10 calendar days (i.e., by June 7, 2025).
On the same day, the United States Government (the “USG”) filed a Notice of Appeal, appealing the CIT decision to the Court of Appeals for the Federal Circuit (“CAFC”). The USG has not yet filed a brief in support of the appeal, which is due by July 28, 2025. Today, May 29, 2025, the USG filed an Emergency Motion to Stay (“MTS”) at the CAFC, seeking to stay the enforcement of the CIT decision. The USG argued that the government will suffer irreparable harm absent a stay, because the “injunction threatens to unwind months of foreign-policy decision-making and sensitive diplomatic negotiations. The USG further stated in its MTS, “{a}bsent at least interim relief from this Court, the United States plans to seek emergency relief from the Supreme Court tomorrow to avoid the irreparable national-security and economic harms at stake.” Within a few short hours of the USG’s motion, the CAFC stayed the CIT judgement while the CAFC considers the USG’s MTS. The Stay Order further directs the plaintiffs-appellees to respond to the USG’s MTS by June 5, 2025 and permits the USG to file a single, consolidated reply in support of its MTS by June 9, 2025.
Also today, the U.S. District Court for the District of Columbia (the “DDC”) issued a decision striking down President Trump’s IEEPA tariff actions in a case brought by two small businesses. The DDC declined to grant transfer of the case to the CIT, which has exclusive jurisdiction over tariff-related civil actions. The court reasoned that it has jurisdiction over the action because IEEPA does not authorize the President to impose tariffs at all, hence it is not a statute that provides for tariffs. Flowing from this ruling, the court found the President exceeded his power to impose tariffs under IEEPA. Taking a different approach from the CIT that permanently enjoins the executive orders, the DDC enjoined the collection of tariffs only with respect to the plaintiffs in the case and stayed the injunction for 14 days to give the government a chance to appeal to the U.S. Court of Appeals for the D.C. Circuit. The USG moved swiftly and filed a Notice of Appeal with the D.C. Circuit this afternoon.
Ultimately, this issue likely will be decided by the U.S. Supreme Court (“SCOTUS”). If the CIT or the DDC decision were upheld by SCOTUS, then importers would be able to recover all IEEPA duties paid from the inception of such duties. Absent a future court decision announcing otherwise, the best procedural way to ensure importers’ rights to recovery is to protest the entries in which such duties were paid. An importer must protest within 180 days after the liquidation of an entry. Entries ordinarily liquidate in 314 days, though there can be entries that are liquidated earlier.
[View source.]
