On May 29, 2025, the U.S. Court of International Trade (CIT) ruled that the tariffs imposed by President Trump under the International Emergency Economic Powers Act (IEEPA) exceeded the statutory authority granted to the executive branch. The court found that trade imbalances and related economic concerns do not constitute the “unusual and extraordinary threat” required to justify use of IEEPA, rendering the tariffs unlawful.
However, the U.S. Court of Appeals for the Federal Circuit has issued a stay, allowing the tariffs to remain in effect while an appeal to the CIT ruling proceeds. The next key event is a hearing scheduled for June 5, 2025, at which the court will consider arguments related to the stay and the merits of the appeal.
Strategic Priorities for General Counsel
- Prepare for Potential Duty Recovery
Ensure your company has preserved documentation of all tariff payments on covered imports. If the CIT’s ruling is ultimately upheld, companies could be eligible for significant refunds, but only if their records are in order and claims are timely filed.
- Evaluate Contract Exposure and Supply Chain Strategy
Review procurement and manufacturing agreements that may be impacted by tariff relief. Now would be a good time to reassess supplier diversification, pricing structures, and risk allocation provisions in anticipation of future shifts in trade policy.
- Monitor Legislative Action to Curb Executive Tariff Authority
The Trade Review Act of 2025, introduced by Senators Maria Cantwell (D-WA) and Chuck Grassley (R-IA), seeks to limit presidential tariff powers by requiring congressional approval for tariffs lasting beyond 60 days and requiring the President to notify Congress within 48 hours prior to enacting such tariffs. If enacted, this legislation could create a more stable policy environment, but law departments should track its progress closely and tailor response plans accordingly.
- Advise Executive Leadership on Scenarios and Implications
General Counsel should brief executive teams on the potential business impacts of both outcomes (continued tariffs or a court-ordered rollback). Consider preparing internal memoranda, board updates, or public disclosure language as appropriate.
- Engage Outside Trade Counsel Strategically
Trade specialists can help preserve refund rights, evaluate compliance exposure, and guide tactical responses depending on how the appeal unfolds. Proactive engagement is especially critical if your company is a high-volume importer.
