Federal Trade Court Rules Trump Lacks Authority for Tariffs Under IEEPA

On May 29, 2025, in a fast-moving case involving President Trump’s authority to issue tariffs using the International Emergency Economic Powers Act (IEEPA), the U.S. Court of Appeals for the Federal Circuit temporarily stayed a ruling from the Court of International Trade (CIT) that held the president does not have the authority to levy tariffs under IEEPA. The Federal Circuit granted the stay of the CIT Order on an administrative basis, ordering the government to file any reply motions by June 9, 2025. During this 10-day pause, the Trump administration’s tariffs remain effect.

On May 28, 2025, the little-known federal CIT issued its now-stayed ruling in two challenges — one brought by 12 states attorneys general and one by private companies — to President Trump’s authority to issue tariffs using IEEPA. 

On May 29, 2025, in a separate proceeding challenging the president’s authority to impose tariffs under IEEPA, the U.S. District Court for the District of Columbia issued a preliminary injunction staying the tariffs under the same provisions, specifically finding that IEEPA does not enable the president to “unilaterally impose, revoke, pause, reinstate, and adjust tariffs to reorder the global economy.” The judge applied the preliminary injunction only to the plaintiffs in that case.

No prior president has used IEEPA to support tariffs, as IEEPA has historically been viewed as only a sanctions authority. In a unanimous per curiam opinion, the three-judge panel of the CIT invalidated using IEEPA to support tariffs under Article I, Section 8, clauses 1 and 3 of the Constitution, which assign to Congress “the exclusive powers to ‘lay and collect Taxes, Duties, Imposts, and Excises’ and to ‘regulate Commerce with foreign Nations.” 

After an extensive review of Congress’ delegation of trade authorities dating back to 1916, the CIT quotes IEEPA’s provision that its “authorities ‘may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared… and may not be exercised for any other purpose.’” The CIT held that IEEPA does not delegate Congress’ power to the President “in the form of authority to impose unlimited tariffs on goods from nearly every country in the world.”

Concluding that IEEPA does not authorize any of the “Worldwide, Retaliatory, or Trafficking Tariff Orders,” the CIT found that narrowly tailored relief was inappropriate as “if the challenged Tariff Orders are unlawful as to Plaintiffs they are unlawful as to all.” 

While the CIT Order permanently enjoined the challenged executive orders imposing the tariffs nationwide, the Trump administration immediately filed for a motion to stay and appealed the order to the Federal Circuit Court of Appeals, which stayed the lower court’s ruling through June 9, 2025, thus allowing the continued collection of the duties that were based on IEEPA under Executive Orders 14193, 14194, 14195 (the “Trafficking Tariffs”), and 14257 (the “Worldwide and Retaliatory Tariffs”) and all their amendments. 

The “Trafficking Tariffs” are those imposed on Canada, Mexico, and China and the “Worldwide and Retaliatory Tariffs” are the global 10% ad valorem and the “reciprocal” global tariff schedule. The CIT’s ruling also reinstated de minimis treatment for shipments valued at less than $800. However, it’s unclear whether a reinstatement of the CIT’s ruling, if the plaintiffs ultimately prevail, would also require the refunding of tariffs already paid.

Tariffs based on other authorities, including Section 232 tariffs on automobiles, aluminum, and steel, and Section 301 tariffs on China, remain in effect under both CIT’s and the D.C. District Court ruling.

The litigation surrounding the tariffs will likely throw a wrench into ongoing trade negotiations with dozens of countries, even while it is under appeal. In addition to the substantive ruling on IEEPA authority, the stay pending appeal and other similar challenges could make their way swiftly to the Supreme Court’s so-called “shadow docket” for emergency relief, particularly in light of pending cases regarding judges’ ability to issue nationwide injunctions. 

If the plaintiffs prevail in reinstating the injunction, Congress may seek to ratify the tariffs, or the administration may try to reinstate the tariffs using other delegated authorities. These rulings are unlikely to bring an end to the volatility that has surrounded the tariffs since they were imposed in April, and long-term planning around tariffs will continue to be challenging.

We will continue to monitor and report on these rapidly changing developments, but if you have any questions, please contact Joe Donovan, Kate Hamann, Allen Braddock, or any member of our Tariff Strategy team.