On August 29, 2025, the U.S. Court of Appeals for the Federal Circuit (the Court of Appeals) affirmed in a 7-4 ruling that although the International Emergency Economic Powers Act (IEEPA) could give President Trump the authority in some cases to impose tariffs, it did not give the administration the authority to impose the reciprocal and fentanyl-related tariffs that have been in place since earlier this year. In a separate Order, the Court of Appeals withheld issuance of its mandate to allow for further appeal to the U.S. Supreme Court, which the administration has already petitioned to take the case, requested to expedite, and received the acquiescence of the private plaintiffs and the state plaintiffs to do so. A ruling on the petition for certiorari is expected soon. Thus, importers will continue to be required to pay these tariffs until the Supreme Court directs otherwise.
The tariffs imposed by the Trump Administration during this term have been directed under a variety of authorities including IEEPA, Section 232 of the Trade Expansion Act of 1962, and Section 301 of the Trade Act of 1974. This ruling addresses the IEEPA tariffs only which include the reciprocal (or "Liberation Day") tariffs and the fentanyl-related tariffs imposed on various Chinese, Canadian, and Mexican goods. The Court of Appeals ruled that the particular tariffs that have been imposed under the asserted IEEPA authority, which were "unbounded in scope, amount, and duration," were not authorized by IEEPA's provision empowering the President to "regulate" the importation of property. The Court of Appeals also issued orders for the case to be remanded back to the Court of International Trade for relief to be provided consistent with applicable Supreme Court precedent. Four judges filed a dissenting opinion suggesting that judicial power to check the President's authority on matters with significant foreign policy implications, such as tariffs and the many trade deals negotiated based on the tariff leverage, may be limited.
In the meantime, the administration also may accelerate its efforts to issue tariffs under alternative legal authorities, including the Section 232 and Section 301 trade authorities. The administration has already issued tariffs or initiated investigation under those authorities for a number of commodities including automobiles, steel, aluminum, and copper (which are already subject to such tariffs), pharmaceuticals, semiconductors, and other electronics (which are subject to ongoing investigation) and on imports from countries such as China and Brazil (written about previously here, here, and here). The administration may also seek to broadly reissue some of these tariffs under Section 122 of the Trade Act of 1974, which permits the President to impose tariffs of up to 15 percent for a period of 150 days in response to balance-of-payments issues.
Charles Schiavo contributed to the preparation of this Alert.
