TRADE ALERT – IEEPA TARIFFS
HEADLINE	Court of International Trade determines IEEPA tariffs are unlawful; District court in D.C. rules IEEPA tariffs are unlawful for other reasons
DATE	May 29, 2025
EFFECTIVE DATE	TBD
SUMMARY OF CHANGES	The Court of International Trade held that the International Emergency Economic Powers Act (IEEPA) does not authorize the imposition of the tariffs on goods from Canada, China, or Mexico, related to fentanyl, or the Reciprocal Tariffs on goods from all countries. It orders that the Executive Orders be vacated and that the United States is permanently enjoined from collecting the tariff. The United States has requested that the Order of the Court of International Trade be stayed pending appeal. The Court of Appeals for the Federal Circuit has stayed the order of the Court of International Trade until the Court of International Trade acts on the request to stay the order. D.C. District Court found the IEEPA tariffs unlawful for different reasons but granted a more limited preliminary injunction affecting two family-owned toy companies and stayed its order pending appeal. The United States appealed this case to the D.C. Circuit Court of Appeals. None of the orders affect Section 232 Tariffs (steel/aluminum/auto parts) or the Section 301 tariffs.
BACKGROUND	FENTANYL IEEPA TARIFFS China President Trump imposed duties of 20% on goods China and Hong Kong entered or withdrawn from warehouse on March 4, 2025 (unless one proves that the goods were shipped prior to February 1, 2025).   Canada and Mexico   March 4, 2025: Effective date for 25% tariffs on goods from Canada and Mexico, to be entered under HTS 9903.01.01.   Goods that qualify for duty-free treatment under the USMCA are exempted from the additional 25% tariffs under HTS 9903.01.04. The Administration said in press reports that this USMCA exception would last until April 2, 2025, but there is no expiration date in the revised orders.   RECIPROCAL IEEPA TARIFFS • April 2, 2025: President Trump issued an EO imposing 10% tariffs on all imports, with enhanced “reciprocal tariffs” of 12% to 50% for certain countries. Annex I. • Currently all country-based reciprocal tariffs are on hold. The 10% base tariff remains in place. • Country-based reciprocal tariffs scheduled to be reimposed on all countries, except China, on July 9, 2025. • Country-based reciprocal tariffs scheduled to be reimposed on Chinese goods at 34% starting on August 12.
DETAILS	Court of International Trade reasons that other tariff laws demonstrate that IEEPA doesn’t authorize the President to impose reciprocal tariffs and that the IEEPA tariffs are not structured to “deal with“ the fentanyl crisis.   D.C. District Court rules that IEEPA is not a tariff statute.   At this time, these decisions do not revoke the tariffs. Importations remain subject to the IEEPA tariffs unless or until further action is taken by the courts or the administration.   These cases are subject to appeal. It is likely to be several months until the appeals are decided. Then the cases are likely to go to the Supreme Court until finalized.  We currently think these cases may not be finalized until the end of 2025 or more likely the middle of 2026.
CITE	V.O.S. Selections, Inc. v. United States, United States Court of International Trade. Learning Resources, Inc. v. Donald J. Trump, United States District Court, District of Columbia.

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