Fred Fischer, Senior Vice President
The Ruling
On May 28, 2025, the Court of International Trade (CIT) ruled that President Trump exceeded his statutory authority when he invoked the International Economic Emergency Powers Act (IEEPA) to enact new tariffs on imports from nearly all U.S. trading partners. The court granted summary judgment for the plaintiffs, vacated the challenged tariffs, and permanently enjoined their operation. The government has 10 days to issue orders implementing the CIT’s permanent injunction voiding the IEEPA tariffs. A copy of the CIT ruling can be found here.
If upheld, the CIT ruling would have significant implications for the administration’s tariff and trade policies and international trade negotiations. The court’s ruling affects the fentanyl tariffs imposed on China in February and Canada and Mexico in March, and the reciprocal tariffs imposed on more than 50 countries in April, including their subsequent modifications.
The plaintiffs challenged the President’s imposition of tariffs under IEEPA and related executive orders, and the court examined whether IEEPA grants the President authority to impose tariffs and whether the tariffs met statutory requirements. The court found that:
- Congress cannot delegate unlimited legislative powers to the President, requiring an intelligible principle to guide the exercise of delegated authority, and that Congress must speak clearly when delegating powers of vast economic and political significance.
- The court held that IEEPA does not authorize the President to impose unlimited tariffs, as this would violate constitutional principles.
- The court found that the trafficking tariffs did not “deal with” the threats they purported to address, failing to meet IEEPA’s requirements.
- The court rejected the argument that the President’s threat assessment under IEEPA is nonjusticiable, affirming judicial review of statutory compliance.
- The court asserted its duty to interpret statutes and determine the limits of delegated authority, emphasizing the separation of powers.
- The court also found that a separate federal law – Section 122 of the Trade Act of 1974 –governs the president’s power to impose tariffs in response to trade deficits, and that statute only permits the president to impose tariff rates of 15 percent or lower, and those tariffs may only remain in effect for 150 days. The trade court concluded that the President may only rely on the authority under Section 122 to impose tariffs to respond to trade deficits.
- The court granted summary judgment for the plaintiffs, vacated the challenged tariffs, and permanently enjoined their operation.
Appeals Process
According to U.S. Code, the CIT’s decision is final and conclusive unless a retrial or rehearing is granted, or an appeal is filed with the U.S. Court of Appeals for the Federal Circuit. The appellants may argue:
- The CIT made errors in interpreting or applying the law, particularly regarding the scope of IEEPA and the President’s authority under it.
- The CIT abused its discretion in its rulings, such as in the assessment of evidence or procedural decisions.
- The ruling raises constitutional questions, such as whether the CIT’s decision infringes on the executive branch’s powers or violates the separation of powers doctrine.
- Factual findings were not supported by sufficient evidence or were clearly erroneous
The government immediately filed an appeal with the U.S. Court of Appeals for the Federal Circuit. In addition to an appeal, the government is likely seeking an emergency stay of the CIT’s ruling and expedited judicial review. Decisions of the U.S. Court of Appeals for the Federal Circuit may be appealed to the U.S. Supreme Court.
Implications for the Trump Administration’s Trade and Tariff Agenda
The CIT ruling, if upheld, would likely have significant implications for President Trump’s trade and tariff agenda, as the ruling restricts the President’s ability to unilaterally impose tariffs under IEEPA without clear Congressional authorization. Most of the tariffs imposed by the Trump Administration will need to be reevaluated or removed, unless another legal basis (e.g., Section 122 of the Trade Act of 1974) can be applied or Congress takes further action. The ruling also changes the dynamics in ongoing reciprocal trade negotiations with more than 50 countries. The CIT ruling does not directly affect tariffs imposed under other statutory authorities such as Section 232 of the Tariff Act of 1962 or Section 301 of the Tariff Act of 1974.
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