US Court of International Trade Strikes Down IEEPA Tariffs | BakerHostetler

Key Takeaways

• A U.S. trade court ruled that tariffs imposed under the IEEPA on Canada, Mexico, China and global reciprocal tariffs are unconstitutional, as the law does not grant the president unlimited authority to regulate imports.
• The court found that these tariffs did not directly address the stated national emergencies, such as immigration and drug trafficking, and thus exceeded the scope of the statute.
• The U.S. government is appealing the decision, and importers should monitor their customs entries and consider filing protests to recover improperly paid duties.

A three-judge panel of the U.S. Court of International Trade ruled on Wednesday, May 28, that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) – namely the tariffs on Canada, Mexico, and China to address immigration and drug-trafficking concerns and to impose worldwide reciprocal tariffs – are unconstitutional, and permanently enjoined them. The court found that the authority to “regulate imports” under IEEPA did not extend to an unbounded authority for the president to impose tariffs. The court found evidence in IEEPA and other statutes that Congress had limited presidential authority to impose tariffs absent more specific statutory directives. The court also found that tariffs to pressure Canada, Mexico, and China to address immigration and drug-trafficking concerns on the northern and southern U.S. borders were not authorized by IEEPA because they did not “deal with” those problems directly. To interpret the statute otherwise would allow the president to invoke IEEPA anytime he wanted to impose burdens on countries to accomplish his policy aims. Congress did not confer such broad authority under the statute.

The U.S. government has already filed its notice to appeal the case to the Court of Appeals for the Federal Circuit. This case will likely find its way to the U.S. Supreme Court, but for the moment, the viability of these IEEPA tariffs is in doubt. Importing companies that have paid IEEPA tariffs should follow the appeals of this case, monitor the liquidation dates of their customs entries and, if necessary, file a protest challenging the payment of those duties within 180 days of liquidation. Protests can be simple and filed electronically by customs brokers. 

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