On May 28, the U.S. Court of International Trade (CIT) ruled that the President does not have an "unbounded tariff authority" under the International Emergency Economic Powers Act (IEEPA) to impose tariffs on imports from nearly every country around the world. President Trump was the first president to invoke the IEEPA — a 1977 law that primarily deals with sanctions and trade embargo — to impose a large percentage of his administration's tariffs. The administration primarily argued that the President's IEEPA authority is non-justiciable, meaning not subject to judicial review. The CIT's three-judge panel found IEEPA does not authorize the President to implement what it referred to as the "trafficking," "worldwide," and "reciprocal" tariffs.
The CIT ruling halted the trafficking tariffs, which set 25% duties on Mexican and Canadian products and 20% duties for Chinese products based on declaring a national emergency under IEEPA related to failure to curb fentanyl smuggling and illegal immigration. The CIT ruling also ordered the end of worldwide "reciprocal" tariffs, which imposed a general 10% duty on most goods from most of the world, with higher rates to be forthcoming on specific countries, based on the declaration of a national emergency linked to trade deficits. The CIT's permanent injunction gave the executive branch up to 10 days to complete the bureaucratic process of ending these tariffs.
However, the Trump administration immediately filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit, and the appellate court has temporarily stayed the CIT's injunction. It has requested expedited briefings from the parties to allow it to assess whether the tariffs should remain in place while it reviews the merits of the case. Pending further court action, the IEEPA-based tariffs remain in place for now.
The CIT ruling does not impact other substantial tariffs implemented under existing trade authority, such as Section 301, Section 232, and anti-dumping/countervailing duties.
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