On May 28, the U.S. Court of International Trade in a case challenging tariffs issued under the International Emergency Economic Powers Act of 1977 (IEEPA) filed by V.O.S. Selections, Inc. and other plaintiffs, and joined in by several states, found that President Donald Trump had exceeded the powers granted to him under IEEPA in imposing certain tariffs. The case involved tariffs that the court called the “Trafficking Tariffs,” which include tariffs 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. The case also involved what the court called the “Worldwide and Retaliatory Tariffs” that include the reciprocal 10% tariffs currently imposed on imports from all nations, as well as the higher nation-specific tariffs set to go into effect July 9.
The plaintiffs challenged whether President Trump’s imposition of these tariffs complied with the requirements of the IEEPA. Though the court initially had denied the plaintiffs' request for injunctive relief to stop imposition of the tariffs, in its decision issued on May 28, the court concluded in a 49-page opinion that the plaintiffs were entitled to judgment as a matter of law, vacating the Trafficking Tariffs and the Worldwide and Retaliatory Tariffs and permanently enjoining, or precluding, the imposition of these tariffs. The court also concluded its decision would apply not only to the plaintiffs who had filed the suit, but rather that the challenged tariffs “are unlawful as to all.”
The court gave the Trump administration 10 days to issue new orders implementing the ruling. The Trump administration has filed notice of appeal, meaning the decision will now be appealed to the U.S. Court of Appeals for the Federal Circuit, whose decision could then be subject to appeal to the U.S. Supreme Court. Despite the appeal, the ruling goes into effect unless the Federal Circuit stays the decision pending the appeal.
What does this mean for you now, unless the court’s decision is stayed on appeal?
- The IEEPA tariffs of 25% on imports from Mexico and Canada (as well as the 10% energy related tariffs on Canada) are vacated by this order.
- The IEEPA tariffs on imports from China are vacated by this order.
- 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) are vacated by this order.
- 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.
We expect to know soon if the Federal Circuit will stay this order while the Trump administration appeals the ruling. If it does so, the tariffs will remain in place until that appeal is decided.
