An Explainer: Unpacking the Court Rulings Against Trump’s “Emergency” Tariffs
By Lori Wallach, Director, Rethink Trade
By Lori Wallach, Director, Rethink Trade
The Trump tariff rollercoaster hit a new loop-de-loop in late May as federal courts invalidated some Trump tariffs, and then an appeals court temporarily reinstated them.
On May 28, the US Court of International Trade (USCIT) permanently suspended all of the tariffs that Trump had imposed on China, Mexico, and Canada on February 1, as well as tariffs on most countries imposed on April 2. The following day, a DC federal district court also ruled against the application of the same tariffs to two specific firms.
But a federal appeals court stayed the ruling temporarily, meaning the tariffs and other policies remain in place for now. Ultimately, the Supreme Court will decide whether the law, the International Emergency Economic Powers Act that Trump used to enact the challenged tariffs and other trade policies provides him with the authority to do so. The federal appeals court is expected to rule by the end of June on whether the stay, and thus these tariffs, will remain in place until a final Supreme Court ruling on the merits.
THE MAY 28 COURT OF INTERNATIONAL TRADE RULING INVALIDATED ALL OF THE TARIFFS BASED ON THE INTERNATIONAL EMERGENCY ECONOMIC POWERS ACT: The May 28 ruling issued a permanent injunction against based on the International Emergency Economic Powers Act, including 10% across-the-board tariffs on most countries; additional higher tariffs on 67 countries now subject to a 90-day pause ending July 9; as well as Mexico-Canada-China “fentanyl” tariffs, that Trump initiated on February 1.
The USCIT also invalidated all of the International Emergency Economic Powers Act-related Trump Executive Orders, which means undoing the termination of de minimis for China, which initially went into effect on May 2, and the pending end of the de minimis loophole for the rest of the world. (De minimis is the trade law loophole that allows four million mainly e-commerce packages per day mainly from China to enter the United States without inspection, taxes or tariffs.) In a judgment order accompanying the slip opinion, the USCIT gave the White House ten days (i.e., until Saturday, June 7) to enact the changes. The ruling does not impact the Section 232 tariffs on steel, aluminum, or autos or the China Section 301 tariffs that were initially imposed in 2018.
THE ADMINISTRATION APPEALED AND NOW HAS A TEMPORARY STAY: Late on May 28, the administration filed a notice of appeal on the merits, and early on Thursday, May 29, administration lawyers filed an 18-page demand for a stay. Later that same day, the US Court of Appeals for the Federal Circuit issued a temporary stay on the USCIT judgment, allowing the tariffs issued under the International Emergency Economic Powers Act to remain in place for now, as well as the termination of de minimis duty-free access for low-value imports from China. The appeals court is requiring final briefs on the stay by Monday, June 9. This means it will likely issue a ruling by the end of June on whether the tariffs and de minimis phaseout will remain in place during the duration of the appeals process until the Supreme Court decides what authorities IEEPA provides to a president.
THE US SUPREME COURT WILL DECIDE WHETHER THE INTERNATIONAL EMERGENCY ECONOMIC POWERS ACT PROVIDES AUTHORITY FOR THE SPECIFIC TARIFFS TRUMP HAS ENACTED: The legality of Trump’s International Economic Emergency Powers Act-based tariffs will be decided by the Supreme Court. But when that will happen exactly is not yet clear. The Supreme Court typically adjourns in late June or early July. The next term starts on October 6, 2025.
In addition to the USCIT ruling, on May 29, a federal district court in Washington, DC also issued a ruling against the International Emergency Economic Powers Act tariffs. However, that injunction is only applicable to the two firms that brought that case. And a legal fight is now underway about whether three additional other cases filed in federal courts challenging the International Emergency Economic Powers Act tariffs will proceed. The administration has petitioned the courts to hold on those cases until the Supreme Court rules on the fundamental question of what tariff authority the statute provides to the president.
WHAT COMES NEXT: It is quite unclear! The first fork in the road is whether the appeals court grants a permanent stay. The administration would almost certainly appeal the stay to the Supreme Court. Will the administration end the tariffs if they lose all appeals on a stay before a final ruling on the merits has not been issued? Or will they refuse to abide by the USCIT injunction? And, longer term, what will they do next if the administration loses on the merits? The US Constitution gives Congress exclusive authority over tariffs, but Congress has delegated that authority to presidents in various statutes. Some scenarios that I could imagine the Trump administration might consider include:
Launching investigations using Section 301 of the Trade Act of 1974 on all/some of the “Big 18” countries/entities now targeted for priority “tariff relief” negotiations, including the European Union. These investigations and a required report of the findings are conditions for a president to exercise broad tariff authority applicable to numerous goods from investigated countries.
Starting Section 232 investigations on more types of goods to show why tariffs are needed to further US national security. Already, the administration has imposed tariffs on steel, aluminum, and autos and initiated investigations into pharmaceuticals, lumber, and copper under Section 232 of the Trade Expansion Act of 1962. This authority allows tariffs on all countries for specific categories of goods.
Using Section 122 of the Trade Act of 1974, which authorizes 10-15% across-the-board tariffs for 150 days, which could be used to sustain tariffs while the administration works on the Section 301 and 232 processes and requirements to apply tariffs using those alternative authorities.
Using the discretion available in Section 321 of the Tariff Act of 1930 to issue a quick executive order to reinstate the termination of de minimis on China and extend it to the rest of the world.
WHAT WAS THE BASIS OF THE MAY 28 RULING: For the April 2 10% across-the-board and higher bespoke tariffs on 67 countries, a very short version is that the International Emergency Economic Powers Act doesn’t authorize a president to just unilaterally impose unlimited tariffs worldwide of various amounts. There is an extensive analysis of how this cannot be what it permits. Congress possesses exclusive constitutional tariff authority and all presidential tariff powers, relying solely on permissible delegations of Congress’s authority. Notably, the ruling is premised on the International Emergency Economic Powers Act providing some authority for a president to enact tariffs, just not unlimited ones applying to nearly all countries and including high and changeable rates. (The court challenges to the International Emergency Economic Powers Act tariffs argue the statute does not provide any tariff authority to a president.)
In explaining why the International Emergency Economic Powers Act does not permit Trump’s April 2 tariffs, the USCIT ruling spotlights Congress’s action to establish a specific, more limited tariff authority for presidents to use to counter trade imbalances. Section 122 of the Trade Act of 1974 allows a president to impose up to 15% tariffs for 150 days for balance of payments and current account deficit crunches (This is the issue that led Nixon to impose 10% across-the-board tariffs in 1971, the last time it was done.). The court also noted that other congressional delegations of tariff authority, like Sections 301 and 232, allow presidents to issue legal tariffs via prescribed procedures based on required findings. (Section 232 is the basis for steel/aluminum/automobile tariffs, Section 301 is the basis for Biden’s 100% China electric vehicle tariffs and solar tariffs, as well as Trump’s first-term tariffs of $350 billion of Chinese imports.)
Therefore, the USCIT ruling is not inherently anti-tariff. Moreover, the court avoided ruling on some of the plaintiffs’ key theories. For instance, instead of doing a broad “nondelegation doctrine” analysis, the USCIT simply noted that Congress had enacted legislation explicitly about how and when tariffs can be used to address trade imbalances, and that this law, Section 122, limits whatever broader tariff authority Congress may have delegated via the International Emergency Economic Powers Act. Effectively, the court ruled that Trump’s use of the International Emergency Economic Powers Act for the April 2 tariffs was so expansive and contrary to a specific trade-imbalance tariff authority grant that it trashes Congress’s constitutional tariff authority. It’s quite possible that even the conservative Supreme Court majority might agree.
In contrast, the logic for invalidating the “fentanyl” tariffs on Mexico, Canada, and China is not convincing. The USCIT basically made up a new limitation on presidential authority by focusing on a clause in the International Emergency Economic Powers Act statute authorizing actions “that deal with” whatever the stated emergency is. The USCIT required a tight nexus of the economic action taken to directly remedy the emergency declared. This is not a standard to which any non-tariff International Emergency Economic Powers Act use has been held in the past. And, in fact, the USCIT’s logic that the law does not allow economic actions that indirectly address an emergency by creating pressure on foreign governments would eviscerate the economic sanctions that are the mainstay of the numerous International Emergency Economic Powers Act actions every president takes over the course of a term.
WHAT IS THE POLITICAL CONTEXT? The political messaging coming from the White House in response is the same sort of attack on “judicial interference” that it has employed in response to losing immigration-related rulings. Furthermore, the administration has pledged to proceed with tariffs one way or another, and is continuing its “tariff relief” negotiations linked to the July 9 end of the 90-day pause on higher, bespoke “reciprocal” tariffs. These negotiations have become extremely controversial, as they have not focused on rebalancing US trade or rebuilding American manufacturing, which Trump promised was the goal of his trade actions. Instead, news of deals that appear tailored for the president’s family, friends, and favored corporate donors emerges daily. To the extent US economic interests at large are being prioritized, it’s those of Big Tech, Big Pharma, and crypto, not manufacturing.
It remains to be seen whether the White House will use new legal strategies to impose tariffs and, if so, whether being forced to use different, more targeted legal authority to do so could result in more strategic tariffs. Such an approach, paired with additional industrial policy tools and competition policy, could help maintain the 2023-2024 boom in new US factory construction.