The Court of Appeals for the Federal Circuit is considering whether the International Emergency Economic Powers Act authorizes the president to impose tariffs as the Trump administration seeks to reverse a lower court ruling that blocked the president’s “reciprocal” tariff regime. Both sides recently submitted lengthy written briefs to the CAFC, and oral arguments before the court’s 11 active judges have been scheduled for July 31. The case is being closely watched by importers and others as it could reshape the boundaries of presidential authority in trade matters.
CIT Decision
In May the Court of International Trade struck down the IEEPA tariffs, holding that this statute does not authorize the president to impose unbounded tariffs. The CIT found that the reciprocal tariffs imposed on imports from all countries on the grounds that the U.S. runs trade deficits with most of them “lack any identifiable limits” and therefore fall outside the scope of allowable actions under IEEPA. The court also ruled that IEEPA may not be used to impose tariffs in response to trade deficits because Congress already provided specific authority for such measures under Section 122 of the Trade Act of 1974, which limits both the rate and duration of such tariffs.
The CIT also ruled that IEEPA’s limited authorities may be exercised only to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared. However, the court said, tariffs imposed under IEEPA on imports from China, Canada, and Mexico due to concerns about illegal immigration and shipments of fentanyl do not meet this condition because they do not directly deal with the identified threat and instead merely aim to create leverage to do so.
(A separate ruling by a federal district court ruled that IEEPA doesn’t authorize the president to impose tariffs at all; that decision has also been appealed.)
CAFC Proceedings
IEEPA as basis for tariffs
In its opening brief before the CAFC, the U.S. government defended the legality of the tariffs, arguing that IEEPA’s statutory language permits the president to regulate imports during a declared national emergency. The administration maintained that the statute’s grant of authority to “regulate, direct and compel” economic transactions includes the power to impose tariffs.
The government contended that the U.S. trade deficit and foreign trade barriers constitute an “unusual and extraordinary threat” to national security, justifying the emergency declaration and the resulting duties. It also argued that courts have historically deferred to the executive branch in matters of national security and foreign affairs and that the judiciary should not second-guess the president’s determination of what constitutes an emergency.
The importers challenging the tariffs countered that IEEPA does not authorize the imposition of tariffs and that the administration’s actions exceed both statutory and constitutional limits. Their response brief asserted that IEEPA was enacted as a sanctions and embargo statute, not as a tool for rewriting tariff schedules. It also argued that the government’s “extraordinary” interpretation of what IEEPA allows “has no support in dictionaries or precedent, and it would have intolerable implications” by effectively enabling the president to impose taxes without congressional approval in violation of constitutional restrictions.
Other statutory provisions
The plaintiffs also argued that Congress has already addressed the president’s authority to impose tariffs in response to trade deficits through Section 122 of the Trade Act of 1974. That provision allows the president to impose temporary tariffs or quotas in response to balance-of-payments issues, but only under specific conditions and for limited durations. By invoking IEEPA instead, the plaintiffs said, the administration is attempting to bypass these carefully crafted limits.
The government asserted that Section 122 and IEEPA can be read in harmony, with IEEPA providing broader emergency powers. But the plaintiffs said the two statutes are in conflict and that Section 122, as the more specific law, must control. “The government’s interpretation does not harmonize IEEPA with Section 122; it allows IEEPA to swallow Section 122,” the brief said.
The administration pointed to Section 338 of the Tariff Act of 1930 as an example of how tariff authority can overlap. The plaintiffs responded that Trump never invoked Section 338 and that doing so would have required specific factual findings that foreign countries imposed discriminatory or unreasonable tariffs or restrictions against U.S. exports, findings that “Trump never made.”
Major questions doctrine
Both sides also addressed the major questions doctrine, a principle requiring Congress to speak clearly when delegating authority over issues of vast economic and political significance. The plaintiffs argued that the imposition of sweeping tariffs under IEEPA—without explicit statutory language authorizing such action—triggers the doctrine and renders the administration’s interpretation invalid. They emphasized that IEEPA does not mention tariffs and that Congress has historically imposed strict limits on tariff authority. The government countered that the doctrine applies primarily to agencies, not to the president, and that IEEPA’s broad language, combined with the president’s constitutional role in foreign affairs, provides sufficient authorization. It also argued that the doctrine should not be used to override clear statutory text or to second-guess Congress’s intent in delegating emergency powers.
Injunction against tariffs
Finally, the government argued that the CIT’s decision to issue a permanent injunction against the tariffs undermines the president’s ability to negotiate with foreign governments, but the plaintiffs said policy concerns cannot justify unlawful conduct. “There are often policy objections to requiring the executive to follow the law,” the brief said, “but such objections do not warrant allowing the President to break the law, even when foreign affairs are at issue.”
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