IEEPA Tariffs Struck Down Again

Tariffs imposed by President Trump this year under the International Emergency Economic Powers Act were struck down again Aug. 29 when the Court of Appeals for the Federal Circuit issued a 7-4 decision upholding a Court of International Trade ruling. However, the tariffs continue to be assessed on subject imports while the litigation is ongoing.

The CAFC affirmed the CIT’s holding that the “reciprocal” and trafficking-related tariffs imposed this year under IEEPA are “unbounded in scope, amount, and duration” and therefore  exceed the authority that law delegates to the president. The CAFC did not decide the broader issue of whether tariffs may be imposed under IEEPA at all; a federal district court ruled earlier this year that they may not, and one CAFC justice in the current case agreed. Even so, the majority opinion discussed this issue at length and appeared skeptical that the term “regulate” in IEEPA necessarily includes the power to impose tariffs, as the government argued.

In light of a recent Supreme Court decision on the legality of nationwide injunctions, the CAFC vacated the CIT’s injunction prohibiting the federal government from collecting the IEEPA tariffs on all imports (not just those made by the plaintiffs to this case) and mandated that the case be sent back to the CIT to reconsider whether an injunction is appropriate and, if so, how broadly it should be applied. The CAFC then essentially paused this remand until Oct. 14 to give the parties to the case the chance to first ask the Supreme Court to address the merits and/or the CAFC’s decision on the injunction. 

Importers should continue to monitor the liquidation of entries where IEEPA tariffs were paid to ensure their rights to potential tariff refunds are not lost, extending liquidations where possible and protesting if entries are liquidated. For further details, please find STR's guidance here.

If your company has entries subject to IEEPA tariffs that have liquidated, or if you have other questions about this litigation and its impact on your business, please contact an ST&R professional or email us at tariffs@strtrade.com.