Late yesterday the U.S. Court of International Trade (CIT) issued the first merits opinion in actions challenging the Trump Administration’s use of the International Emergency Economic Powers Act (IEEPA) to enact certain tariffs, holding all IEEPA tariffs issued to date invalid. The ruling permanently enjoins their imposition and instructs the government to issue all necessary administrative orders to effectuate the injunction within ten calendar days. While the practical details remain to be sorted out, including the Administration’s next procedural steps in litigation, avenues to preserve relief from the already-assessed tariffs may soon exist.
CIT Concludes Worldwide Tariffs Exceed Statutory Authority
On April 2, the President invoked IEEPA to impose tariffs in response to a national emergency comprising the “underlying conditions, including a lack of reciprocity in our bilateral trade relationship, disparate tariff rates and non-tariff barriers, and U.S. trading partners’ economic policies that suppress domestic wages and consumption, as indicated by large and persistent annual U.S. goods trade deficits.” The Court termed these tariffs as “Worldwide and Retaliatory Tariffs,” also often referred to as “Reciprocal” tariffs. The President paused, raised, lowered, and otherwise modified these tariffs in various ways after their initial imposition, but at the time of the CIT’s decision, the tariffs amounted to 10% for all covered countries and products.
After confirming its exclusive jurisdiction over the dispute — an issue that has been hotly contested in other litigations over the tariffs — the CIT examined whether the imposition of tariffs comported with IEEPA’s grant of authority to “regulate…importation.” The CIT held that separation of powers concerns, IEEPA’s legislative history, and Congress’ enactment of more narrow, non-emergency legislation specifically related to balance-of-payments issues, indicated that any tariff-making authority conferred by IEEPA did not “delegate unbounded tariff authority to the President.”
The Court found that construing IEEPA to permit “unbounded tariffs” would be unconstitutional insofar as the Constitution establishes a separation of powers between the legislative and executive branches and expressly confers the tariff power to Congress. The CIT acknowledged that a predecessor statute, the Trading with the Enemy Act (TWEA), also authorized the President to “regulate…importation” and in Yoshida an appellate court held that this provision authorized President Nixon to impose limited and temporary tariffs in 1971. Although Yoshida interpreted the TWEA as authorizing tariff authority, the Yoshida court “repeatedly noted the constitutional concerns that would arise if the President exercised unlimited tariff authority based on the words ‘regulate…importation.’” Like the court in Yoshida, the CIT did “not read the words ‘regulate…importation’ in IEEPA as authorizing the President to impose whatever tariff rates he deems desirable” because “such a reading would create an unconstitutional delegation of power.”
The CIT explained that Congress enacted Section 122 of the Trade Act of 1974 (Section 122) subsequent to TWEA to provide specific and narrow authority to the President to address balance-of-payments deficits. Section 122 sets specific limits on the President’s authority to respond to this particular type of problem, e.g., a 15 percent cap on surcharges and a maximum duration of 150 days. According to the CIT, following Congress’ enactment of Section 122, even large and serious balance-of-payments deficits do not trigger IEEPA’s emergency authorities. Instead, such issues justify only the President’s imposition of remedies provided under Section 122. In other words, “Section 122 removes the President’s power to impose remedies in response to balance-of-payments deficits, and specifically trade deficits, from the broader powers granted to a president during a national emergency under IEEPA by establishing an explicit non-emergency statute with greater limitations.” Thus, the Court held, the words “regulate…importation” in IEEPA do not permit the President to impose tariffs in response to balance-of-payments deficits, such as trade imbalances. Because the Worldwide and Retaliatory Tariffs did not comply with the narrower limitations set forth by Congress in Section 122, the President lacked the authority to impose such tariffs.
Fentanyl Tariffs on Canada, Mexico, and China Found Unlawful
The CIT also ruled that the fentanyl-related tariffs, which it termed the “Trafficking Tariffs” and that imposed duties on imports from the People’s Republic of China (China), Canada, and Mexico, violated 50 U.S.C. § 1701, which limits a President’s exercise of IEEPA’s emergency powers “to a limited set of situations.” Specifically, the CIT found that the powers authorized by IEEPA are available only when four conditions are satisfied. First, there must be a “threat . . . which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States.” Second, this threat must be “unusual and extraordinary.” Third, a national emergency must be declared with respect to the threat. And fourth, the President’s IEEPA authority “may only be exercised to deal with” the threat.
Characterizing these requirements as both justiciable and more than a “symbolic festoon,” the CIT deemed the Trafficking Tariffs invalid because they do not “deal with” the threats outlined in the Executive Order. The CIT rejected the Government’s argument that “dealing with” the threat was accomplished by “pressur[ing] those countries to address the crisis” by inducing them “to change bad behaviors that the President believes are hurting Americans and our national security.” Instead, applying ordinary canons of statutory interpretation, the CIT held that to “deal with” a threat within the meaning of IEEPA required that the action taken directly address a problem, not create leverage to pressure a solution.
What the CIT’s Opinion Does—and Does Not—Do
The CIT observed that “if the challenged Tariff Orders are unlawful as to Plaintiffs they are unlawful as to all.” Given this, and the fact that the judgment declares the Executive Orders creating, amending, or modifying the existing IEEPA tariffs to be invalid, the CIT’s order would appear to affect all importers, not only the plaintiffs in these actions.
This decision does not necessarily preclude the President from relying on IEEPA to impose different tariffs in the future. In fact, the CIT appeared to recognize that IEEPA may confer some tariff-making authority upon the President. Were the President to fashion entirely new tariffs that conform to IEEPA’s narrow limitations, the CIT might reach a different outcome.
Nor does this decision have any direct impact on the existing tariffs and pending investigations pursuant to Section 232 of the Trade Expansion Act of 1962 (Section 232) and Section 301 of the Trade Act of 1974 (Section 301). Different statutory authorities underpin those tariffs and investigations, which cover items such as steel, aluminum, automobile parts, semiconductors, pharmaceuticals, and wood products. In fact, the CIT’s opinion specifically juxtaposed the extensive pre-tariff procedures prescribed by Section 232 and Section 301, with the limited procedures required by IEEPA.
Next Steps in the Process
The CIT provided the Government with ten calendar days to issue administrative orders necessary to effectuate the permanent injunction. In practical terms, this means that the CIT’s injunction, although binding, is not likely to be implemented until the expiration of that 10-day period. For importers that have already paid the now-invalidated tariffs, any forthcoming “administrative orders” referenced by the CIT’s judgment would presumably spell out procedures for requesting refunds.
In the meantime, however, the Government quickly appealed the decision to the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit already docketed those appeals, a faster-than-usual pace that suggests the Government may be pursuing an emergency motion to stay enforcement of the CIT’s injunction. It thus remains to be seen whether implementation of the IEEPA tariff injunction will occur while the Government’s appeal is pending.
Reacting to Changes in the Tariff Landscape
Importers may want to monitor recent entries to ascertain which may be eligible to benefit from any implementation of the CIT’s injunction of the IEEPA tariffs. 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.
This post has been edited May 29, 2025.