Earlier this year, the U.S. Court of International Trade found that President Donald Trump had exceeded the powers granted to him under the International Emergency Economic Powers Act of 1977 (IEEPA) in imposing “Trafficking Tariffs,” which include tariffs the administration imposed on imports from China, as well as the 25% tariffs imposed on imports from Canada, 10% tariffs on certain Canadian energy products and Mexico. We wrote about it here. The case also involved what the court called the “Worldwide and Retaliatory Tariffs,” which include the reciprocal 10% tariffs currently imposed on imports from all nations, as well as the higher nation-specific tariffs that were originally set to go into effect July 9.
The Court of International Trade concluded the challenged tariffs were “unlawful as to all,” not just the plaintiffs who had filed the suit. Accordingly, the court issued an order vacating the Trafficking Tariffs and the Worldwide and Retaliatory Tariffs and permanently enjoining, or precluding, the imposition of these tariffs. The Trump administration appealed the decision to the U.S. Court of Appeals for the Federal Circuit.
On August 29, the Federal Circuit affirmed the Court of International Trade’s decision relating to the legality of the Trafficking Tariffs and the Worldwide and Retaliatory Tariffs, meaning, the Federal Circuit agrees the imposition of these tariffs exceed President Trump’s authority. However, the Federal Circuit vacated the Court of International Trade’s injunction finding the court had not properly weighed factors required for issuance of such an injunction.
This means the Trafficking Tariffs and Worldwide and Retaliatory Tariffs will remain in effect while the case is remanded to the Court of International Trade to weigh the injunction factors and decide what type of injunctive relief may be appropriate. Meanwhile, the decision will likely be appealed first to the U.S. Supreme Court on the issue of legality of the tariffs. A ruling from the Supreme Court in any such appeal would not likely come before 2026.
So for now, the tariffs remain in effect. If the ruling is affirmed by the Supreme Court, the ruling would affect the following tariffs:
- The IEEPA tariffs of 25% on imports from Mexico and Canada (as well as the 10% energy related tariffs on Canada).
- The IEEPA tariffs on imports from China.
- The IEEPA retaliatory tariffs of 10% on imports from all nations (and the higher nation-specific tariffs set to go into effect on July 9).
The steel and aluminum tariffs and tariffs on automobiles and automobile parts issued under Section 232 or other laws were not part of this case, are not affected by this order and remain in place.
