On Wednesday, May 28, 2025, and Thursday, May 29, 2025, three significant court actions impacted the tariff and trade landscape.
First, on May 28, a three-judge panel of the U.S. Court of International Trade (CIT) issued a unanimous decision invalidating a series of tariffs imposed by President Trump earlier this year under the International Emergency Economic Powers Act (IEEPA). The court specifically held that the IEEPA does not authorize the imposition of broad tariffs without a clearly defined and substantiated national emergency. Therefore, the executive orders imposing these tariffs are unlawful and void.
This means that IEEPA-based tariffs are no longer enforceable. IEEPA tariffs include the “reciprocal” 10% baseline tariff on all goods (including goods from China, which have a 34% baseline, with 24% currently suspended), and the additional “Fentanyl” tariffs on Canadian, Mexican, and Chinese imports.
The decision is effective immediately, and current entries should no longer be assessed under the IEEPA tariffs. There is also potential for refund eligibility based on tariffs already paid under the invalidated orders. The U.S. Customs and Border Protection is expected to issue guidance in the coming days, including instructions for processing entries without the IEEPA tariffs and preserving rights to refunds.
The decision only affects tariffs issued under IEEPA, which encompass a majority of the tariffs issued since President Trump took office. The order does not affect any of the tariffs imposed during President Trump’s first administration, including tariffs on steel and aluminum issued under Section 232 of the Trade Expansion Act of 1962, and tariffs on certain itemized goods from China issued under Section 301 of the U.S. Trade Act of 1974. Tariffs on automobiles and automobile parts that were imposed by Proclamation on April 3, 2025, were likewise issued under Section 232 and are therefore not affected.
Importantly, tariffs that are not affected include Section 232 and Section 301. Section 232 tariffs are industry-specific (e.g., steel, aluminum, autos). Section 301 tariffs are from Trump Term 1 (e.g., specific Chinese goods). While President Trump has not directly commented on the decision, his Deputy Press Secretary noted: “It is not for unelected judges to decide how to properly address a national emergency.” The White House now has 10 days to halt any tariffs affected by the ruling.
Second, on Thursday, May 29, the U.S. District Court for the District of Columbia also ruled against the IEEPA imposed tariffs. The U.S. District Court for the District of Columbia ruled that the IEEPA powers do not give the President the ability to impose, revoke, and reissue tariffs in a way to reshape the global economy. The U.S. Department of Justice reportedly appealed this decision.
Third, also on Thursday, May 29, in response to the CIT decision, the U.S. Department of Justice filed an appeal with the United States Court of Appeals for the Federal Circuit to stay the CIT decision. The White House asked the United States Court of Appeals for the Federal Circuit to halt the CIT order while the White House prepares an appeal for emergency relief to the Supreme Court of the United States. In the third shockwave impacting the tariff landscape, the Court of Appeals for the Federal Circuit granted the White House request. With the United States District Court for the District of Columbia ruling against the tariffs, thereby making further court review is even more likely.
What does this uncertainty mean for businesses and supply chains? Businesses should expect that the Trump administration will continue vigorously pursuing and enforcing trade remedies to implement the Administration’s priorities. The America First Trade Policy (AFTP) makes clear that the Administration will proceed with reviewing and using all available levers of trade enforcement. While the United States Court of International Trade and the United States District Court rulings could potentially provide a reprieve to an uncertain tariff landscape, it is likely that more changes are coming in the near-term.
While the court cases proceed, businesses and supply chains should anticipate an increase in existing trade enforcement. Specifically, businesses should anticipate an increase in antidumping and countervailing duty investigations, an increase in the use of Section 201 Import Surge proceedings; Section 301 Unfair Trade proceedings; and an increase in Section 232 investigations. It is also likely that the AFTP will be used to foster additional negotiation of other global trade agreements, such as the United States–United Kingdom Free Trade Agreement, renegotiation of the USMCA, and other regional and bilateral trade agreements, all of which would also impact tariffs and business operations.
