Client Alert: May 28, 2025
TRUMP TARIFFS STRUCK DOWN: On May 28, 2025, the U.S. Court of International Trade (USCIT) ruled that tariffs issued by President Trump under the International Economic Emergency Powers Act (IEEPA) are unconstitutional. The court’s decision vacates and permanently enjoins the IEEPA-based tariffs imposed in February 2025 on Canada (E.O. 14193), Mexico (E.O. 14194), and China (E.O. 14195, as amended), as well as the worldwide reciprocal tariffs (E.O. 14257) imposed in April 2025 on virtually all other U.S. trading partners. The tariffs on steel, aluminum, and auto parts remain in effect, as these were issued pursuant to Section 232 of the Trade Expansion Act of 1962, as well as Section 301 tariffs on certain Chinese goods issued under the Trade Act of 1974, both separate statutory authorities from IEEPA.
Ruling on two cases which challenged the constitutionality of the IEEPA-based tariffs, a panel of USCIT Judges held that the Constitution assigns to Congress the exclusive authority to impose tariffs, and that IEEPA does not delegate to the President the power to impose tariffs. Therefore, the USCIT ruled that “IEEPA does not authorize any of the” Canada, Mexico, China, or Reciprocal tariffs, and that “the challenged Tariff Orders are unlawful,” granting the plaintiffs’ motions for summary judgment and permanently enjoining the tariffs. The case is captioned V.O.S. Selections, Inc. et al v. Donald J. Trump et al, Case No. 1:25-cv-00066-GSK-TMR-JAR (Ct. Int’l Trade 2025).
The USCIT’s decision gave the Executive Branch 10 days to issue administrative orders necessary to roll back the unlawful tariffs, however, the U.S. Department of Justice has already filed a Notice of Appeal indicating that it will appeal the USCIT’s ruling to the Court of Appeals for the Federal Circuit.
Given that the tariffs have been ruled unlawful and permanently enjoined by the USCIT, importers who paid duties under the IEEPA tariffs may be eligible for refunds of duties paid. While forthcoming CBP guidance may provide greater insight into refund processes in this unprecedented case, generally, importers may contest CBP decisions relating to duty assessment by filing a protest under the procedures set forth in 19 C.F.R. Part 174. However, protests must be filed within 180 days of the notice of liquidation/reliquidation or the date of liquidation/reliquidation, so time is of the essence. Importers should promptly assess their entry records to identify entries eligible for refunds and file protests if necessary.
Although not addressed in the USCIT’s May 28, 2025, ruling, the ruling also calls into question the constitutionality of E.O. 14256, in which President Trump invoked IEEPA to eliminate the Section 321 de minimis exemption for low-value shipments from China or containing Chinese-origin goods. A separate case currently pending before the USCIT, Axle of Dearborn, d/b/a/ Detroit Axle v. Dep’t of Commerce, challenges E.O. 14256 on similar grounds, with the plaintiff arguing that IEEPA does not authorize the President to eliminate a statutory duty exemption such as Section 321 based on 19 U.S.C. § 1321. Today’s ruling may suggest that the USCIT is inclined to agree with the Detroit Axle plaintiffs’ narrow reading of IEEPA, which could result in a judicial restoration of the de minimis exemption for low value Chinese-origin goods, which we will have to wait and see.
Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. LMD Trade Law PLLC (and its attorneys and employees) shall not have any liability in connection with any use of these materials. The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel. Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.