A split U.S. Court of Appeals for the Federal Circuit ruled 7-4 that the International Emergency Economic Powers Act, which Trump cited to issue his so-called “reciprocal tariffs” and a trio of tariffs aimed at Canada, Mexico, and China, does not grant the president the power to levy tariffs and ruled those tariffs unlawful.
“We conclude Congress, in enacting IEEPA, did not give the President wide-ranging authority to impose tariffs of the nature of the Trafficking and Reciprocal Tariffs simply by the use of the term ‘regulate…importation,’” the majority opinion said.
The appeals court upheld the U.S. Court of International Trade’s ruling that the tariffs exceeded the president’s powers under IEEPA, but vacated the lower court’s universal injunction and asked it to “reevaluate the propriety of granting injunctive relief and the proper scope of such relief,” considering prior Supreme Court precedent such as the justices’ June ruling in Trump v. CASA.
The high court’s ruling in CASA significantly limited the ability of lower courts to issue universal injunctions, meaning the CIT will have to determine whether it can still issue a sweeping injunction or one that only applies to those who filed the lawsuit.
The four dissenting judges on the panel said they would have reversed the lower court’s summary judgment and sent the case back to the court for further proceedings.
“We agree with the majority’s decision on jurisdiction and standing and on the need for reconsideration of the remedy if the tariffs are unlawful. But we disagree with the majority’s conclusion on the issue of the tariffs’ legality. We conclude that plaintiffs have not justified summary judgment in their favor on either statutory or constitutional grounds,” Judge Richard Taranto wrote for the dissent.
The tariffs at the center of this lawsuit include those levied against Canada, Mexico, and China regarding the flow of fentanyl from those countries into the United States, alongside the “Liberation Day” tariffs Trump unveiled in April. The “Liberation Day” tariffs include the baseline 10% tariff for most countries and the higher “reciprocal” rates for select other countries.
TRUMP’S TARIFFS MET WITH SKEPTICISM BY FEDERAL APPEALS COURT PANEL
The president’s tariffs on aluminum, steel, and cars, which were enacted citing a different statute, are not in dispute.
The Trump administration has made the president’s sweeping tariffs a key part of its trade agenda. This lawsuit and another one are scheduled to go before the U.S. Court of Appeals for the D.C. Circuit next month; they will test his power to use IEEPA to levy those duties. The administration is widely expected to appeal the ruling to the Supreme Court.
