UPDATED: May 29, 2025
Overview: A Landmark Court Decision That Impacts U.S. Trade
The U.S. Court of International Trade (CIT) has ruled that tariffs introduced under the International Emergency Economic Powers Act (IEEPA) were not legally supported. These tariffs included broad levies on imports from countries such as China, Mexico, and Canada, as well as a universal tariff on other goods. This decision may influence import costs and trade operations for U.S. businesses.
The tariffs, introduced under IEEPA, included:
- 30% tariff on Chinese imports
- 25% tariff on goods from Mexico and Canada
- 10% universal tariff on all other imports
Legal Challenge
A group of small businesses and twelve U.S. states filed a lawsuit contesting the tariffs. The plaintiffs argued that the executive branch lacked authority under IEEPA to impose these tariffs without Congressional approval. They asserted that the power to regulate commerce and impose duties lies with Congress.
The CIT concluded that:
- IEEPA does not provide unrestricted authority to impose tariffs.
- Trade deficits do not meet the criteria of an “unusual and extraordinary threat” under the statute.
- Regulation of commerce remains a Congressional responsibility.
The court issued a permanent injunction, halting enforcement of the tariffs in question.
Implications for U.S. Importers
The ruling may result in changes for importers:
- Possible changes in costs due to eliminated tariffs.
- Potential delays or adjustments at ports as enforcement is paused.
- Need for reassessment of sourcing and trade compliance strategies.
Tariffs under other statutory authorities, such as Section 232 on steel and aluminum, are not affected by this decision.
The decision has been quickly appealed to the U.S. Court of Appeals for the Federal Circuit. Further legal review may occur, potentially including the U.S. Supreme Court.
