Court Strikes Down Trump’s “Reciprocal” Tariffs
The U.S. Court of International Trade, which hears disputes involving international trade and customs laws, struck down President Donald Trump’s International Emergency Economic Powers Act tariffs yesterday.
What happened: In a unanimous opinion, the three-judge panel found that the IEEPA “does not authorize the President to impose unbounded tariffs” and the administration exceeded its authority in imposing the “reciprocal” and fentanyl IEEPA tariffs.
What it means: The finding strikes down the 10% baseline additional “reciprocal” tariffs announced on April 2 as well as the “reciprocal” tariffs of between 20% and 50% on another 65 or so trading partners with which the U.S. runs trade deficits.
- Those tariffs that are currently “paused” were scheduled to snap back into place on July 9 if trade deals were not reached by then.
- The court further nullified the 25% fentanyl IEEPA tariffs on products from Canada and Mexico and the 20% fentanyl IEEPA tariff on products from China.
Refunds? The court also ordered that the IEEPA tariffs collected so far be “vacated,” raising questions about possible refunds.
- The court gave Customs and Border Patrol 10 days to implement the ruling, but the U.S. government may ask for a stay of enforcement—relieving the government of obligation to issue refunds—pending appeal, which could result in CBP continuing to collect but not liquidate tariffs.
An appeal: The DOJ quickly filed an appeal with the U.S. Court of Appeals for the Federal Circuit, and said that it may ask the Supreme Court to pause the ruling as soon as Friday.
Section 232: The ruling does not affect other tariffs the administration has or might impose under Section 232 of the Trade Expansion Act of 1962 on national security grounds.