On May 28, the Court of International Trade (CIT) unanimously struck down the recent tariff actions imposed by President Trump under the International Emergency Economic Powers Act (IEEPA). The three-judge panel of the CIT sided with a group of businesses ruling that the President does not have the authority under the law to impose sweeping global tariffs and concluded that an unlimited delegation of tariff authority would be unconstitutional. Additionally, the CIT found the tariffs imposed on China, Canada, and Mexico addressing the threat of illicit drugs at the border to be unlawful on the grounds that they do not actually address the alleged threats identified by the President.
The ruling nullified Trump’s executive orders imposing 25 percent duties on Canadian and Mexican products and a 20 percent tariff on Chinese products. It also struck down a 10 percent tariff imposed on all U.S. trading partners, as well as Trump’s paused “reciprocal” tariffs of between 20 and 50 percent on approximately 60 trading partners, which are currently scheduled to go into effect on July 9 if foreign governments can’t reach a deal with the White House before then.
The CIT vacated and permanently enjoined imposition of the tariffs. The impact of the CIT’s judgment, such as the availability of refunds, remains to be seen. The CIT gave the government ten days to take further action to comply with the CIT’s judgment.
The Trump Administration has announced it is appealing this ruling, and the Department of Justice immediately filed for an appeal. They may also seek a stay of the CIT reversal of tariffs during the pendency of the appeal. Appeals from final decisions of the CIT may be taken to the United States Court of Appeals for the Federal Circuit and, ultimately, to the Supreme Court of the United States.
The Alliance will continue to keep you apprised.
