Late Tuesday, the U.S. Court of Appeals for the Federal Circuit granted the Trump Administration’s request for an administrative stay of the Judgment of the U.S. Court of International Trade which had enjoined tariffs imposed under the International Emergency Economic Powers Act (IEEPA) as unlawful.
With the stay order, the IEEPA fentanyl tariffs on China and non-USMCA qualifying goods from Canada and Mexico as well as “Reciprocal” Tariffs can remain in place pending the resolution of the merits of the appeal.
The Court of Appeals also determined that the merits appeal will proceed before the entire court given its importance, instead of using the usual three-judge panel format. The briefing schedule has, furthermore, been expedited to allow for oral argument on July 31, 2025. This schedule indicates that the Federal Circuit will most likely issue its opinion by mid-August or early September.
Unraveling IEEPA Tariffs Must Wait
On May 28, 2025, the U.S. Court of International Trade (CIT) became the first court to issue a merits opinion in two of the many cases challenging the tariff regimes imposed pursuant to IEEPA. The CIT held that all existing IEEPA tariff regimes were unlawful. These include the so-called “reciprocal” tariffs, as well as the three “fentanyl”-related tariff regimes applicable to products of Canada, Mexico, and the People’s Republic of China, respectively.
The CIT ordered these IEEPA tariff regimes to be permanently enjoined and provided the government with ten days to issue administrative orders necessary to terminate the tariffs. This triggered a flurry of litigation activity by the Trump Administration, which immediately noticed an appeal at the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) and simultaneously sought stays before both the CIT and the Federal Circuit. Within a day of the government’s motion to stay before the Federal Circuit, that court issued a temporary administrative stay, meant to maintain the status quo while the Federal Circuit considered the matter more thoroughly. For its part, the CIT deferred deciding on the Trump Administration’s request for a stay, pending the Federal Circuit’s decision.
An Expedited Briefing and Disposition Schedule
The schedule for briefing the government’s motion to stay before the Federal Circuit concluded on Monday. With yesterday’s order, the Federal Circuit has resolved this initial procedural dispute as quickly as practicable. The order does not provide any particular reason for maintaining the stay, merely noting that the court “considered the traditional stay factors” and “concludes a stay is warranted under these circumstances.” It then quotes from Trump v. Wilcox, for the proposition that the purpose of a stay “is not to conclusively determine the rights of the parties, but to balance the equities as the litigation moves forward.” Together, this provides little, if any, indication of the Federal Circuit’s view of the merits.
The Federal Circuit did, however, conclude that the case itself is “exceptional[ly] importan[t]” and will depart from its ordinary procedures in two major respects. First, instead of proceeding before a three-judge panel, the appeal will proceed en banc from the start, i.e., before all circuit judges in regular active service who are not recused or disqualified. Second, the case will be significantly expedited, with oral argument to be scheduled for July 31, 2025, just over two months after docketing. This is much faster than usual. In an ordinary case, the appellant’s opening brief would have been due by July 28.
While there is no firm deadline by which the Federal Circuit must issue an opinion after oral argument, the court’s pace thus far suggests an intent to do so no later than mid-August or early September. The Federal Circuit is thus likely to be the first Court of Appeals to issue a merits opinion in an IEEPA tariff challenge. In this regard, there may also have been strategic considerations at play in maintaining the stay, as it short-circuits the government’s ability to pursue a petition for stay on the Supreme Court’s emergency docket.
There are, moreover, substantive implications to the Federal Circuit’s decision to proceed en banc in the first instance. The decision of the U.S. Court of Customs and Patent Appeals (a predecessor of the Federal Circuit) in United States v. Yoshida Intern., Inc., which interpreted language materially identical to IEEPA as conferring some tariff-making authority, binds the CIT and featured prominently in the CIT’s decision. Moreover, in another recent opinion finding certain IEEPA tariffs unlawful, the U.S. District Court for the District of Columbia stridently disagreed with Yoshida’s conclusion that statutory language nearly identical to IEEPA confers tariff-making authority. The Federal Circuit’s en banc posture opens the possibility of the court overruling Yoshida, in part or in whole. This entails a degree of risk for both sides, as courts have thus far applied certain aspects of Yoshida in favor of plaintiffs, while applying other aspects in the government’s favor.
Ultimately, given the importance of this case, whichever party loses this appeal may seek further review before the U.S. Supreme Court. A Federal Circuit decision issued by September would permit Supreme Court review to be timely sought by the Supreme Court’s next session in early October 2025.
Managing Supply Chains
Given that Federal Circuit proceedings are likely to proceed on a significantly expedited schedule, importers may wish to monitor entries on an ongoing basis to ascertain which were assessed IEEPA tariffs. If the Federal Circuit finds that some or all IEEPA tariffs are unlawful, it is possible that the government may be ordered to alter or rescind those tariff regimes as soon as within three months. The attorneys, licensed customs brokers, compliance specialists, and economists of Cassidy Levy Kent have extensive experience counseling companies in a wide range of industries on tariff matters as well as how to optimize their supply chains for tariff considerations and maintain U.S. market access.