The U.S. Court of International Trade ("CIT") issued an opinion today that the International Emergency Economic Powers Act ("IEEPA") does not authorize any of the emergency tariffs enacted by President Trump. The decision renders the tariffs invalid and contrary to law.
The Court's decision concerns the following tariffs:
Trafficking Tariffs: Canada Tariff Order (25%); Canadian Energy Resources (10%); China Tariff Order (10%, later raised to 20%); Mexico Tariff Order (25%).
Worldwide and Retaliatory Tariffs: 10% universal tariff and country-specific reciprocal rates; China-specific rate.
The decision vacates the subject Executive Orders and would otherwise prevent the government from collecting the tariffs. The government has 10 days to issue administrative orders to effectuate the permanent injunction based on the Court's judgment. We anticipate the forthcoming orders will not only stop the collection of the tariffs but address refunds for past tariffs collected. This may be impacted should the government seek a stay of the judgment pending the appeal already filed to the Court of Appeals for the Federal Circuit ("CAFC").
This decision comes in response to lawsuits filed by a number of states and a select group of importers in matters which were consolidated before the trade court based on its jurisdiction over tariffs. The CIT's three-judge panel reasoned IEEPA does not confer unlimited tariff authority to the President, and the tariffs imposed have not been limited or tailored in sufficient fashion to specifically deal with the threats used as a basis for imposing the tariffs.
This decision does not impact prior Section 301 tariffs or Section 232 steel and aluminum tariffs enacted under other statutory authorities.
We will continue to monitor these developments as they progress. Should you have any immediate questions, please contact one of the following trade professionals here.