On May 28 and 29, 2025, the US Court of International Trade (CIT) and the US District Court for the District of Columbia (DDC) set aside tariffs imposed by the Trump Administration under the International Emergency Economic Powers Act (IEEPA). For now, these tariffs will continue to be levied while the decisions are stayed and appealed.
The courts struck down the Administration’s IEEPA-based tariff measures, which include:
- general 10% tariffs on goods from essentially the rest of the world; and
- country-specific tariffs on China, Canada, and Mexico.
For convenience, we use the CIT’s terminology, referring to the former as “Worldwide and Retaliatory Tariffs” and the latter as “Trafficking Tariffs.”
The court decisions have been stayed and appealed. The US Court of Appeals for the Federal Circuit has issued a stay of the CIT’s permanent, nationwide injunction. DDC’s preliminary injunction is stayed for 14 days. In the meantime, the Trump Administration has appealed both decisions.
Non-IEEPA tariffs are unaffected. Tariffs authorized by other statutes remain in place, including the Administration’s 25% tariffs on steel, aluminum, and automobiles. These are imposed under Section 232 of the Trade Expansion Act of 1968, which empowers the President to impose tariffs for goods that the Commerce Department determines threaten national security.
The courts ruled that the President’s tariffs overstep his powers under IEEPA. CIT’s decision states that the President exceeded the authority in IEEPA granted to “regulate . . . importation” to “deal with” a national emergency. DDC’s decision states even more broadly that IEEPA does not authorize tariffs.
Since taking office in January, President Trump imposed the (i) Worldwide and Retaliatory Tariffs to address US trade deficits; and (ii) Trafficking Tariffs to combat fentanyl trafficking and other public safety issues.
In particular, CIT held that IEEPA does not authorize the Worldwide and Retaliatory Tariffs and the Trafficking Tariffs because:
- The Worldwide and Retaliatory Tariffs do not fit within IEEPA’s statutory grant of authority to “regulate . . . importation,” and any such authorization allowing the President to impose tariff rates he deems desirable would create an unconstitutional delegation of power. The authority to impose tariffs to address a trade imbalance instead derived from Section 122 of the Trade Act of 1974 (described below).
- The Trafficking Tariffs do not “deal with” the declared national emergency because the tariffs merely exert pressure on countries to address the President’s concerns.
The decisions foreshadow a “Plan B” for the invalidated IEEPA tariffs. The Trump Administration has already signaled its willingness to continue to pursue these tariffs under other authorities, if needed. This includes a proposal to double steel and aluminum tariffs under Section 232 from 25% to 50%. If the Trump Administration loses on appeal, other tariff authorities could potentially be used to effectively reconstruct the IEEPA-based tariffs.
For example, CIT reasoned that Section 122 of the Trade Act of 1974 authorizes the President to impose worldwide tariffs to address “large and serious balance-of-payments deficits” and unfair trade practices. These tariffs are limited, however, to 15% for a maximum of 150 days (unless extended by Congress).
This is in addition to the industry and country-specific authorities under:
- Section 232: tariffs to address imports determined to threaten national security. In addition to the Section 232 tariffs described above, there are presently Section 232 investigations into timber and lumber, copper, semiconductors, critical minerals and derivative products, pharmaceutical products, trucks, and commercial aircraft and parts.
- Section 301: tariffs to address “unreasonable” or “discriminatory action” by a country that burdens or restricts US commerce. Section 301 tariffs are already in place on a variety of products from China subject to certain exclusions. Presently, there are Section 301 investigations into China’s semiconductor, maritime, logistics, and shipbuilding sectors, among others.
- Section 338: duties of up to 50% on countries that unfairly discriminate against US commerce. This authority does not appear to have ever been used.
Can importers who paid IEEPA-based tariffs obtain a refund? The courts have not addressed whether importers are entitled to refunds for IEEPA-based tariff payments. It has been reported that importers will likely be able to recover unconstitutional tariff payments. The exact process and timing, however, are still to be seen and likely will not be available until the court cases have been resolved.
Our global sanctions and trade team is closely monitoring these litigation and tariff-related developments. Please contact us if you have any questions on how to navigate the new trade landscape.
