Careers

Diversity, Equity & Inclusion

Experience

Innovation

Interactive Maps

Locations

About

Pages

Meet our team of innovators
Ask us how we do it

Professionals

Insights

Services

Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 8 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

Home | Thompson Hine LLP

Atlanta

Chicago

Cincinnati

Cleveland

Columbus

Dayton

Los Angeles

Minneapolis

New York

Washington, D.C.

core/separator

core/heading

On May 28, the U.S. Court of International Trade (CIT) permanently enjoined tariffs imposed by President Donald Trump under the International Emergency Economic Powers Act (IEEPA), finding that he exceeded statutory and constitutional authority by imposing broad tariffs on imports from China, Canada, Mexico, and other countries.

core/list-item

The CIT held that IEEPA does not grant the president unlimited tariff authority, emphasizing that “the Constitution assigns Congress the exclusive powers to ‘lay and collect Taxes, Duties, Imposts and Excises,’ and to ‘regulate Commerce with foreign Nations’” and that “any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional.”

The CIT found the so-called “Trafficking Tariffs” unlawful because they did not “deal with” the specific threats identified in the Executive Orders (EOs) but instead sought to create leverage over foreign governments – a purpose not authorized by IEEPA.

The CIT found that the so-called “Worldwide and Retaliatory Tariffs” fail because they exceed any authority granted to the president by IEEPA to regulate importation through tariffs.

The U.S. government appealed the decision, and the U.S. Court of Appeals for the Federal Circuit (CAFC) temporarily stayed the CIT’s ruling on May 29, allowing the tariffs to remain in effect while the appeal is considered.

The CIT’s decision does not impact existing Section 301 tariffs on China or Section 232 tariffs on steel, aluminum, autos, and related products; these remain in full effect.

Until further notice, importers should continue to pay all applicable tariffs, maintain detailed records, and monitor for further developments, as the legal status of the IEEPA-based tariffs remains subject to ongoing appellate review.

core/list

The litigation arises from a series of EOs and proclamations President Trump issued in early 2025, which imposed tariffs on goods from Canada, Mexico, China, and other countries. The president invoked IEEPA to justify these actions, citing threats posed by international cartels, drug trafficking, and persistent trade deficits. All of the EOs and their tariffs are referenced by the CIT as the “Trafficking Tariffs” for the IEEPA tariffs on China, Canada and Mexico for the influx of illicit drugs into the United States and as the “Worldwide and Retaliatory Tariffs” for the IEEPA duties imposed on all foreign countries and the specific retaliatory duties imposed on certain countries. The plaintiffs – including five small businesses and a coalition of 12 states – challenged the tariffs’ legality, arguing that they exceed the president’s statutory and constitutional authority.

core/paragraph

On May 28, the CIT <a href="https://storage.courtlistener.com/recap/gov.uscourts.cit.17091/gov.uscourts.cit.17091.65.0.pdf" target="_blank" rel="noreferrer noopener">entered judgment</a> in two related cases against the United States and permanently enjoined certain EOs imposing the Trafficking Tariffs and the Worldwide and Retaliatory Tariffs enacted under IEEPA. The CIT determined that “the words ‘regulate … importation’ cannot grant the President unlimited tariff authority,” and found that the Trafficking Tariffs “fail because they do not deal with the threats set forth in those orders” and that the Worldwide and Retaliatory Tariffs fail because they “exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs.” Judges Gary Katzmann, Jane Restani, and Timothy Reif issued a permanent nationwide injunction against the tariffs, stating that if the tariffs are “unlawful as to Plaintiffs they are unlawful as to all.” As a result, the court struck down (canceled) the tariffs and said the president’s EOs were not valid under the law.

The U.S. government immediately appealed the CIT’s decision. On May 29, the CAFC, which reviews such appeals, <a href="https://www.cafc.uscourts.gov/opinions-orders/25-1812.ORDER.5-29-2025_2522636.pdf">de</a><a href="https://www.cafc.uscourts.gov/opinions-orders/25-1812.ORDER.5-29-2025_2522636.pdf" target="_blank" rel="noreferrer noopener">c</a><a href="https://www.cafc.uscourts.gov/opinions-orders/25-1812.ORDER.5-29-2025_2522636.pdf">ided</a> to temporarily pause (stay) the lower court’s ruling while it considers the government’s request for a longer stay during the appeal process. This means that, for now, the tariffs can remain in place until the CAFC makes its decision. The CAFC also combined the related appeals into one case and set a schedule for both sides to submit their arguments about whether the stay should continue. A decision on the stay should be made shortly after June 9.

The central legal question before the CIT was whether IEEPA gives the president the power to impose unlimited tariffs on imports from nearly every country or whether such authority is constrained by constitutional and statutory limits.

The court began its analysis by emphasizing that the Constitution assigns Congress the exclusive powers to “lay and collect Taxes, Duties, Imposts and Excises,” and to “regulate Commerce with foreign Nations.” (U.S. Const. art. I, § 8, cls. 1, 3). The court stated:

The question in the two cases before the court is whether the [IEEPA] delegates these powers to the President in the form of authority to impose unlimited tariffs on goods from nearly every country in the world. The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder.

The CIT analyzed the statutory language in light of the “nondelegation doctrine” and the “major questions doctrine,” both of which serve to prevent Congress from assigning its core legislative functions to the executive branch.

Regardless of whether the court views the President’s actions through the nondelegation doctrine, through the major questions doctrine, or simply with separation of powers in mind, any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional.

The CIT found that the phrase “regulate … importation” in IEEPA does not grant the president unlimited tariff authority. The court distinguished the present case from prior precedent (United States v. Yoshida Int’l. Inc. (Yoshida II), referenced throughout both the plaintiffs’ and U.S. government defendants’ filings), noting that this earlier case involved a limited, temporary surcharge, whereas the current tariffs were “unbounded” in scope and duration.

Like the court in Yoshida II, this court does not read the words “regulate … importation” in IEEPA as authorizing the President to impose whatever tariff rates he deems desirable. Indeed, such a reading would create an unconstitutional delegation of power.

The CIT further held that Congress, in enacting IEEPA, intended to limit – not expand – presidential authority over international economic transactions. The legislative history and the existence of more specific statutes were cited as evidence that Congress reserved the power to impose tariffs in response to trade deficits for itself, subject to explicit limitations.

Congress enacted IEEPA to limit executive authority over international economic transactions, not merely to continue the executive authority granted by TWEA [Trading with the Enemy Act].

In applying this portion of the IEEPA analysis to the Worldwide and Retaliatory Tariffs, the CIT held that the phrase “regulate … importation,” under “any construction that would comport with the separation-of-powers underpinnings of the nondelegation and major questions doctrines, does not authorize anything as unbounded as the Worldwide and Retaliatory Tariffs,” deciding that the Worldwide and Retaliatory Tariffs are “ultra vires and contrary to law.” Instead, the court noted that these tariffs respond to an imbalance in trade – a type of balance-of-payments deficit – and fall under the narrower, non-emergency authorities in Section 122 of the Trade Act of 1974.

The CIT then scrutinized whether President Trump’s actions satisfied IEEPA’s requirement that its powers may only be exercised to “deal with an unusual and extraordinary threat with respect to which a national emergency has been declared … and may not be exercised for any other purpose.” (50 U.S.C. § 1701(b)). The CIT found, however, that the Trafficking Tariffs did not “deal with” the specific threats identified in the EOs but rather sought to create leverage over foreign governments – a purpose not authorized by IEEPA.

The Trafficking Orders do not “deal with” their stated objectives. Rather, as the Government acknowledges, the Orders aim to create leverage to “deal with” those objectives…. Surely this is not what Congress meant when it clarified that IEEPA powers “may not be exercised for any other purpose” than to “deal with” a threat.

Recommended Actions for U.S. Companies and Importers

Continue compliance with IEEPA tariffs until further notice. Although the CIT has ruled that the IEEPA-based tariffs (such as the 20% Trafficking Tariff on China, the 25% Trafficking Tariffs on Canada and Mexico, and the Worldwide and Retaliatory Tariffs) are invalid, the CAFC has issued a temporary stay of that decision. This means the tariffs remain in effect for now. U.S. companies and importers of record should continue to pay all applicable tariffs as usual unless and until U.S. Customs and Border Protection or another government authority issues new instructions. Overpayments can be refunded if the tariffs are ultimately removed, but failure to pay could result in penalties or delays.

Pay Section 301 and Section 232 tariffs, which remain unaffected. TheCIT’s ruling does not affect the existing China tariffs under Section 301 of the Trade Act of 1974 or the tariffs under Section 232 of the Trade Adjustment Act of 1962 on steel, aluminum, autos, and related products. These tariffs remain in full effect and should continue to be paid and managed.

Prepare for potential reimplementation of tariffs. The Trump administration has already appealed the CIT’s decision to the CAFC and is seeking to keep the tariffs in place during the appeal. There is also the possibility that the administration could attempt to reimpose similar tariffs using other legal authorities, such as Section 338 of the Trade Act of 1930 or Section 122 of the Trade Act of 1974. Notably, the CIT opined that “balance-of-payment deficits” (the administration’s stated reason for the Worldwide and Retaliatory Tariffs) can be remedied under Section 122, which allows for tariffs up to 15% for a maximum of 150 days. Section 338 permits tariffs up to 50% with no time limit. Companies should be aware that the legal landscape may shift rapidly and should be prepared for the possibility of new or modified tariffs being implemented through these alternative mechanisms.

Maintain flexibility and document all tariff payments. Given the ongoing legal uncertainty, companies should maintain detailed records of all tariff payments and related correspondence. This will facilitate potential refund claims if these IEEPA tariffs are ultimately struck down and ensure compliance in the event of audits or enforcement actions.

Consult with legal counsel. Given the ongoing legal uncertainty and the potential for rapid regulatory changes, importers and affected businesses should consult with legal counsel to ensure compliance and to develop strategies for managing risk and responding to new developments.

The CIT’s decision represents a significant limitation on the president’s ability to unilaterally impose tariffs under IEEPA, reaffirming the constitutional role of Congress in regulating international trade and imposing duties. The court’s reasoning underscores the importance of statutory limits and legislative intent in delegating emergency powers to the executive branch. The CAFC’s temporary stay leaves the ultimate resolution pending, but the CIT’s analysis provides a clear framework for evaluating future exercises of emergency economic powers. Legal professionals and importers should closely monitor further developments in these consolidated appeals, as the outcome will shape the contours of executive authority in trade and emergency contexts for years to come.

This advisory bulletin may be reproduced, in whole or in part, with the prior permission of Thompson Hine LLP and acknowledgment of its source and copyright. This publication is intended to inform clients about legal matters of current interest. It is not intended as legal advice. Readers should not act upon the information contained in it without professional counsel.

This document may be considered attorney advertising in some jurisdictions.

https://admin.thompsonhine.com/wp-content/uploads/2025/05/Transition-Update-CIT-Enjoins-IEEPA-Tariffs-but-CAFC-Issues-Temporary-Stay.pdf

CIT Enjoins IEEPA Tariffs but CAFC Issues Temporary Stay

Services