In One Sentence

• On May 28, the Court of International Trade (CIT) ruled that President Trump’s use of the International Economic Emergency Power Act (IEEPA) to enact tariffs on imports from U.S. trading partners was unlawful.
• ​​Trump’s “Liberation Day” tariffs cited the 1970s IEEPA, which permits the president to regulate imports during national emergencies but does not explicitly authorize tariffs.
• In April, Democratic attorneys general from 12 states sued to block Trump’s tariffs, arguing at the Court of International Trade that he overstepped his authority while imposing his sweeping tariffs.
• On May 20, a Florida judge backed Trump’s claim that IEEPA authorizes tariffs and transferred the suit to the Court of International Trade, handing the administration an early legal win.
• Earlier on May 13, California and a coalition of private companies represented by the Pacific Legal Foundation (PLF) filed motions in their parallel tariff suits, with California seeking a nationwide injunction in district court and PLF urging CIT to rule that the tariffs exceeded the President’s statutory authority and that the use of the tariff instrument under the IEEPA was unconstitutional under the nondelegation doctrine.

Mark the Essentials

• The Department of Justice has appealed the CIT ruling, while the fate of over a dozen ongoing trade negotiations remain unclear.
• During the May 13 hearing, CIT judges scrutinized whether the Nixon-era Yoshida precedent supported Trump’s IEEPA tariffs, questioning whether Congress intended the law to authorize such duties given subsequent trade statutes like Sections 122 and 301.
• At the May 21 hearing, CIT judges questioned whether Trump’s use of IEEPA is a “political question” beyond judicial review, challenging DOJ’s claim of broad authority and stressing the need to assess if the tariffs address an “unusual and extraordinary” threat.
• Meanwhile, the DOJ has urged regional courts to transfer IEEPA tariff suits to the Court of International Trade, arguing that parallel litigation undermines CIT’s exclusive jurisdiction, already exercised in three active cases including V.O.S. Selections and the state AGs’ suit.
• From the Democratic side, in a May 7 brief to the Court of International Trade, 12 Democratic attorneys general argued that Trump’s IEEPA tariffs have “irreparably disrupted” state budgeting and procurement, citing unpredictable costs such as a $100,000 surcharge on university lab equipment and volatile vendor pricing.
• Additionally, on May 20, 148 House Democrats filed an amicus brief to CIT supporting the states-led IEEPA suit, stating that while they hold diverse views on trade policy, they are united in believing the President has usurped Congress’s constitutional authority by using IEEPA to impose tariffs.

Keeping an Eye On…

• Boom. The hammer just dropped on the Trump administration at the U.S. Court of International Trade on its cherished “Liberation Day” and other tariffs. In a notable decision late on May 28, the court ruled that the administration’s reciprocal, retaliatory and fentanyl duties, levied under the “War and National Defense” title of the U.S. Code and utilizing the authority of the International Emergency Economic Powers Act (IEEPA), amounted to an audacious and unlawful assertion of executive power that exceeded the authority granted to the president by IEEPA to regulate imports. “Regulate … importation” in the text of IEEPA did not grant the president unlimited authority to rewrite the tariff schedules, the court suggested; indeed, such a reading if left to stand would amount to an unconstitutional delegation of power. Besides, the legislative history surrounding the IEEPA confirmed that Congress had cabined the president’s authority to impose tariffs in response to balance-of-payments deficits to a separate specific, narrower, time-limited non-emergency statute (Section 122 of the Trade Act of 1974), and that the words “regulate … importation” in the IEEPA did not permit the president to impose tariffs in response to balance-of-payment deficits. If the president nevertheless wished to impose the tariffs to address the large and persistent trade deficits (which is one of the key balance-of-payment deficits), he would have to comply with the limitations laid out in Section 122 (i.e., tariffs limited in duration to 150 days, unless extended by Congress, and limited to 15% ad valorem).
  
  

  The Trump administration had earlier mounted a spirited defense of its tariffs, with even Secretary of State Rubio, Treasury Secretary Bessent, Commerce Secretary Lutnick, and U.S. Trade Representative Greer making individual submissions in defense of the administration’s position to the Court of International Trade (CIT). The administration’s chain of logic ran essentially thus: the U.S.’ large and persistent current account deficits have led to a hollowing out of domestic manufacturing, which constitutes an “unusual and extraordinary threat” and rises to being a “national emergency”. The emergency is no mere trade policy emergency; it is a full-blown security and foreign policy-linked one. While Congress is constitutionally tasked with regulating trade and commerce, on foreign and security policy matters, it is the president who enjoys extensive powers, and a “measure of skepticism” of “unheralded power” that is supposedly being usurped by the president to regulate a significant portion of the U.S. economy is not warranted. Besides, Congress, and not the judiciary, is the appropriate review body. A declaration of an emergency under the National Emergencies Act (NEA) is a non-justiciable political question that needs to be resolved by the political branches (the same argument has been marshaled at the WTO’s dispute settlement body in defense of the U.S.’ “essential security interest” argument) and not by judicial organs. Congress enjoys fast track procedures in this regard to terminate a president’s national emergency declaration – and, in the current instance, has chosen not to do so. As such, the courts must lay off too.  More lately, the administration’s cabinet appointees have tacked on the argument that negotiations with dozens of countries on the strength of the IEEPA-authorized tariffs to address the “national emergency” are in a delicate state. Voiding the legal basis of the administration’s tariffs would do irreparable harm to the foreign and security policy interests of the U.S.
  
  

  Well, we shall have to wait and see now if the voiding of the tariffs really amounts to the “foreign policy disaster scenario” that US Trade Representative Greer alluded to in his submission. One thing is clear though: the administration’s argument that the tariffs are no mere trade policy instrument but relate rather to foreign and security policy matters – and are hence amenable to the president’s emergency powers authority – has fallen flat at its first test. Tariffs are a trade and commercial policy issue and must be dealt with authorities, including national security authorities such as Section 232 of the Trade Expansion Act of 1962, that fall under the “Customs Duties” title of the U.S. Code – not the “War and National Defense” title of the U.S. Code. Going forward, it is a certainty that the Trump administration will appeal the ruling while hoping to keep the tariffs in effect during litigation (the U.S. Court of Appeals for the Federal Circuit has temporarily stayed the CIT’s judgment). It remains to be seen if the administration also takes recourse to Section 122 during the interim. But if the administration insists on fighting to the bitter end, it will likely find an uncooperative Supreme Court which has ceased to defer blindly to executive authority and the administrative state over the past decade or so. So much for the half-life of the radioactive “Liberation Day” tariffs!   

Expanded Reading

• Federal court strikes down Trump’s tariffs on countries around the world, POLITICO, May 28, 2025
• A dozen US states decry Trump’s “blank check” tariffs in lawsuit, Reuters, May 21, 2025.
• Judge says Trump has power to impose tariffs, but punts lawsuit to different court, ABC News, May 23, 2025. 
• State Attorneys General Challenge US President’s Tariff Authority Under IEEPA, Morgan Lewis, May 19, 2025.
• Trump tariffs face major legal hurdle as federal trade court hears challenge, CNBC, May 13, 2025.
• Pelosi, House Democrats Challenge Trump’s Unlawful, Chaotic Imposition of IEEPA Tariffs, Office of Nancy Pelosi, May 13, 2025.