On Friday evening, August 29, 2025, as Americans settled into the beginning of a long holiday weekend, the U.S. Court of Appeals for the Federal Circuit released its highly anticipated opinion in V.O.S. Selections, Inc. v. Trump, ruling that many of President Trump's recent tariffs exceeded his authority to impose. This sets up a high-stakes fight in the U.S. Supreme Court that could result in the opportunity for importers to receive hundreds of billions of dollars in duty refunds—if they properly preserve their rights.
The Trafficking and Reciprocal Tariffs
As DWT has advised, the tariff power being constitutionally granted to Congress, among the statutes the President has invoked by executive order to impose tariffs during his second Administration's trade war, is Section 203(a)(1)(B) of the International Emergency Economic Powers Act of 1977 (IEEPA), 50 U.S.C. § 1702(a)(1)(B), which authorizes the President to "regulate … importation" to deal with a foreign threat to the national security, foreign policy, or economy of the United States. Although President Nixon had imposed tariffs under a predecessor statute, this marked the first time IEEPA has been used to justify tariffs, making this legally a matter of first impression.
These tariffs include two sets, among others: first, those on Canada, Mexico, and China, imposed in response to the three countries' alleged roles in facilitating illegal immigration and fentanyl trafficking; and, second, those on nearly all trading partners at various rates meant to compensate for persistent U.S. trade deficits and to respond to any retaliatory actions by foreign governments. These "trafficking" and "reciprocal" tariffs have been in effect in some modified form since February or March 2025, with importers required to pay the duties where applicable.
In April 2025, five small businesses and 12 states challenged these tariffs in the U.S. Court of International Trade (CIT)—the court of first instance for trade matters—where a three-judge panel consolidated the cases. In May, the CIT held the tariffs unlawful on summary judgment and permanently enjoined their enforcement nationwide. The order was quickly stayed by the Federal Circuit, which heard oral arguments en banc in July and decided the case last Friday.
Federal Circuit Decision
In the opinion, a majority of seven judges affirmed the CIT decision per curiam, "agree[ing] that IEEPA's grant of presidential authority to 'regulate' imports does not authorize" the trafficking and reciprocal tariffs. First, the court was persuaded by the fact that IEEPA—unlike other, more traditional trade statutes such as Section 232 of the Trade Expansion Act of 1962, 19 U.S.C. § 1862, and Section 301 of the Trade Act of 1974, id. § 2411—"did not use the term 'tariff' or any of its synonyms," and "whenever Congress intends to delegate to the President the authority to impose tariffs, it does so explicitly." The court noted that tariffs are taxes, and "[t]he power to 'regulate' has long been understood to be distinct from the power to 'tax,'" which in the Constitution is separately enumerated. This interpretation was reinforced by the fact that in other statutes "Congress has provided specific substantive limitations and procedural guidelines to be followed in imposing any such tariffs," which are absent from IEEPA. Second, the court explained that the near-limitless and unprecedented power claimed in levying the trafficking and reciprocal tariffs "runs afoul of the major questions doctrine" of West Virginia v. EPA, 597 U.S. 697 (2022)—which requires a clear expression of intent by Congress where it intends to delegate authority over matters with vast economic or political consequences—especially in the context of taxation, "a core Congressional power." Four judges dissented, stating in part that as "IEEPA's language, as confirmed by its history, authorizes tariffs to regulate importation," the plaintiffs had not met their burden to show on summary judgment that these tariffs are unlawful.
Nonetheless, the Federal Circuit vacated the CIT's injunction in light of Trump v. CASA, Inc., 145 S. Ct. 2540 (2025), which limited the application of injunctions to parties involved in the case. Although the remedy to be granted would again be in the hands of the CIT on remand, the Federal Circuit (on its own initiative) stayed its decision through October 14 to allow time for the government to seek review in the Supreme Court—which it did on September 3. The stay is now in effect until the Supreme Court denies certiorari or issues a final judgment on the merits. The government's motion to expedite states that the plaintiffs do not oppose certiorari and have agreed to an expedited timeline with oral argument in November.
What Importers Should Do to Preserve Refund Rights
While the trafficking and reciprocal tariffs remain in place and duties remain due for now, importers should prepare immediately for the possibility these duties will be refundable if the Supreme Court affirms the Federal Circuit decision or decides not to hear the case at all. While the courts arguably could institute a supervised claims process or grant other relief, cautious importers may wish to act affirmatively to preserve their rights to refunds in light of the decision in CASA and the questions it raises regarding relief for parties not before the court.
The action importers should take depends on the liquidation status of affected entries. When bringing goods into the United States, an importer of record is generally required to deposit the estimated amount of duties owed and to file entry paperwork with the information enabling U.S. Customs and Border Protection (CBP) to confirm that amount. This assessment is a process known as liquidation and under 19 U.S.C. § 1504 must occur within one year of the entry date—and in practice usually occurs 314 days following entry—unless extended up to three times by CBP or upon the importer's request. At liquidation, CBP will determine the correct duties owed, and issue to the importer of record a check refunding any overpayment or a bill for any underpayment. Under § 1514, CBP's determination becomes final after 180 days unless the importer challenges it through an administrative protest that, if denied by CBP, can underlie a court challenge or, if granted, result in a refund.
For entries on which duties under the trafficking or reciprocal tariffs have been paid that have not been liquidated, an importer should consider requesting an extension of liquidation based upon V.O.S. Selections. In the event that the trafficking and reciprocal tariffs are finally held unlawful, an importer may then correct any unliquidated entries and expect a refund at liquidation. Because none of these tariffs were in effect earlier than March 2025, this course of action should cover the vast majority of subject entries at this point in time. For such entries that have been liquidated, the importer should consider filing a protest, asking CBP to hold a decision on the protest in abeyance until the court case is resolved. CBP may be obliged to grant the protest in the event that the Federal Circuit's ruling holds. If CBP denies the protest, the importer will have the right to proceed to court under the CIT's 28 U.S.C. § 1581(a) jurisdiction.
Additionally, an affected importer may have interest in filing a court case, both as a failsafe approach attempting to bypass the protest route and in light of CASA. This would conceivably fall under the CIT's § 1581(i) two-year residual jurisdiction, as does V.O.S. Selections itself, and place the importer before the court as a party entitled to relief. However an importer chooses to proceed, it is imperative to keep good records of the duties paid, as they are paid, so that refund claims can be substantiated, whether in coordination with customs brokers or in-house, and liquidation statuses can be monitored to avoid missing deadlines. We suggest regularly downloading payment data from CBP's Automated Commercial Environment (ACE) to keep records complete.
Although the Federal Circuit expressly declined to "decid[e] whether IEEPA authorizes any tariffs at all," the actions above should be taken with respect to any duties paid pursuant to tariffs imposed under IEEPA, whether that tariff is the subject of the litigation or not. For instance, in addition to the trafficking and reciprocal tariffs, IEEPA is being used to support tariffs on Brazilian goods for the government's actions in "conflict with … the principle of free expression and free and fair elections, the rule of law, and respect for human rights," and on Indian goods for importing Russian oil despite the war in Ukraine. The decision makes the basis for those tariffs thinner, if it doesn't rule them out entirely; indeed, the concurrence states "that IEEPA does not authorize the President to impose any tariffs." Not directly vulnerable by virtue of this ruling, however, are tariffs imposed since Inauguration Day pursuant to other authorities, such as those on steel and aluminum under Section 232 or on Chinese goods under Section 301 (the latter of which is partially subject to challenge in a parallel pending Federal Circuit case).
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