The U.S. Court of Appeals for the Federal Circuit on Aug. 29 said President Donald Trump exceeded his authority under the International Emergency Economic Powers Act by imposing the reciprocal tariffs and tariffs on China, Canada and Mexico to combat the flow of fentanyl. Declining to address whether IEEPA categorically provides for tariffs, though spilling much ink on the topic, a majority of the court held that IEEPA doesn't confer unbounded tariff authority (V.O.S. Selections v. Donald J. Trump, Fed. Cir. #s 25-1812, -1813).
The U.S. Court of Appeals for the Federal Circuit on Aug. 29 said the president doesn't have unlimited tariff authority under the International Emergency Economic Powers Act. Seven of the court's 11 total justices presiding over the case affirmed the Court of International Trade's conclusion that President Donald Trump's reciprocal tariffs and tariffs on China, Canada and Mexico meant to combat the flow of fentanyl exceed the president's authority under IEEPA.
While many attorneys believe that one of the cases on the legality of President Donald Trump's tariffs is on a collision course with the Supreme Court, questions remain about exactly when the high court will review the case and in what form. One possibility would see the lead appeal, V.O.S. Selections v. Trump, which currently sits before the U.S. Court of Appeals for the Federal Circuit, head to the Supreme Court's emergency, or "shadow," docket.
A law professor from Georgetown University and a former Biden administration official have differing outlooks on the future of the lawsuits on tariffs imposed under the International Emergency Economic Powers Act filed in courts. Professor Marty Lederman said he would be "very surprised" if the Federal Circuit or Supreme Court ruled against the government on non-delegation or major questions doctrine grounds. Lawyer and former federal official Peter Harrell, however, said that the courts may welcome an opportunity to curb executive power.
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The U.S. is using "magical thinking" as the basis for its defense in the case against the legality of tariffs imposed under the International Emergency Economic Powers Act, said Rick Woldenberg, CEO of Hand2Mind and Learning Resources, the plaintiffs in the suit currently at the U.S. Court of Appeals for the D.C. Circuit.
In a reply brief, California said Aug. 18 that the U.S. had conceded the state’s challenge to President Donald Trump’s International Emergency Economic Powers Act tariffs “arises out of” the IEEPA. The government’s following argument, that it also arises from Trump’s recent executive orders modifying the Harmonized Tariff Schedule to implement the tariffs, fails because those orders weren’t authorized by a “law of the United States,” it said (State of California v. Donald J. Trump, 9th Cir. # 25-3493).
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Importers' argument that the tariffs imposed using the International Emergency Economic Powers Act don't arise out of the Harmonized Tariff Schedule of the U.S. "strains the statutory text past the breaking point," the government argued in a reply brief at the U.S. Court of Appeals for the D.C. Circuit (Learning Resources v. Donald J. Trump, D.C. Cir. # 25-5202).
Sidley trade practice co-lead Ted Muprhy advised clients to prepare now for a potential court ruling overturning International Emergency Economic Powers Act tariffs by downloading import reports from ACE to demonstrate how much they have paid in IEEPA tariffs since they began. He also said they should do so each month from now on, until there is a final resolution in court.