Trump tariffs face a judicial reality check

In one of the cases and courts I discussed in my essay entitled "Trump's tariff strategy tests the limits of presidential power and legal authority," Daily Journal, May 6, 2025,   the United States Court of International Trade (CIT) has reached a decision. In Oregon et al. v. Trump, the court found that Trump exceeded his authority in issuing the tariffs in question. Further, the court ordered that the tariffs be vacated and their operations permanently enjoined. Specially, the three-judge panel unanimously found that:

"The Constitution assigns Congress the exclusive powers to 'lay and collect Taxes, Duties, Imposts and Excises,' and to 'regulate Commerce with foreign Nations.'" U.S. Const. art. I, § 8, cls. 1, 3. The question in the two cases before the court is whether the International Emergency Economic Powers Act of 1977 (IEEPA) delegates these powers to the President in the form of authority to impose unlimited tariffs on goods from nearly every country in the world. The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder.

Overview of the case

On May 28, 2025, the CIT ruled on two consolidated cases involving challenges to tariffs imposed by the President under the International Emergency Economic Powers Act (IEEPA). The plaintiffs included both private companies (V.O.S. Selections, Inc. v. Trump, Case No. 25-00066; referred to by the court as the V.O.S Plaintiffs), and several U.S. states (State of Oregon v. Trump, Case No. 25-00077; referred to by the court as the States Plaintiffs), who argued that the tariffs exceeded the President's authority under IEEPA. See Slip Opinions 2025, number 25-66 at https://www.cit.uscourts.gov/content/slip-opinions-2025.

Legal background

The court examined the constitutional allocation of tariff powers to Congress and the statutory framework of IEEPA. It noted that IEEPA does not grant the President unlimited authority to impose tariffs, as such authority would conflict with the Constitution's separation of powers. The court emphasized that IEEPA's powers are limited to addressing "unusual and extraordinary threats" with a declared national emergency.

Factual background

Since taking office, Trump quickly began declaring national emergencies and imposing tariffs on goods from Canada, Mexico, and China, citing drug trafficking and trade imbalances as justification. The tariffs included a 25% duty on Canadian and Mexican products and a 20% duty on Chinese products. Additionally, a general 10% duty was imposed on imports from all trading partners, with higher rates for specific countries.

Procedural background

The V.O.S. Plaintiffs and State Plaintiffs filed lawsuits challenging the tariffs, arguing they were beyond the President's authority under IEEPA. The court granted summary judgment in favor of the plaintiffs, finding no genuine dispute of material fact.

Jurisdiction and standing

The court asserted its exclusive jurisdiction under 28 U.S.C. § 1581(i) to hear cases involving tariffs and duties. It found that both the V.O.S. Plaintiffs and State Plaintiffs had standing, as they demonstrated economic harm from the tariffs.

Court's analysis

The court concluded that IEEPA does not authorize the Worldwide and Retaliatory Tariffs because they lack identifiable limits and do not address an "unusual and extraordinary threat." The court also found that the trafficking tariffs did not "deal with" the threats they purported to address, as required by IEEPA.

Conclusion

The court held that the tariffs exceeded the President's authority under IEEPA and were therefore unlawful as a matter of law. It vacated the challenged tariff orders and permanently enjoined their operation. The court granted the plaintiffs' motions for summary judgment and denied their motions for preliminary injunction as moot.

Now we must wait and see how the U.S. District Court for the Northern District of California rules on similar facts and law in California v. Trump. On May 20, 2025, the U.S. District Court of the Northern District of Florida, although siding with Trump on the merits, stating as its basis the 50-year-old case of Yoshida International v. U.S., sustaining President Nixon's 10% duty imposing a 10% duty under the Trading With the Enemy Act, the IEEPA's predecessor; Presiding Judge T. Kent Wetherell nonetheless transferred the case (Emily Ley Paper Inc. d/b/a Simplied v. Donald J. Trump, ND Fla #3:25-00464) to the CIT. See Dkt . Nos. 5 and 37, at https://ecf.flnd.uscourts.gov/cgi-bin/DktRpt.pl?838619638445753-L_1_0-1

But wait, the Trump empire strikes back! Temporarily

On May 29, 2025, the Court of Appeals for the Federal Circuit issued an order granting the motion by Defendant-Applicants Trump, et al, allowing the president to continue collecting tariffs under the IEEPA while the appeal is prosecuted. Here's the docket entry filed by the court:

"ORDER filed. The motions to consolidate appeals [1092676-2]; [1092675-2] filed by Defendant-Appellants are granted. The requests for an immediate stay [1092776-2]; [1092779-2] are granted to the extent that the judgments and the permanent injunctions entered by the Court of International Trade in these cases are temporarily stayed. The parties are directed to immediately inform this court of any action taken by the Court of International Trade. Plaintiffs-Appellees' response to the motion to stay due 6/5/25. Reply due 6/9/25. The revised official caption is reflected in the order. See the order for full and complete details. By: En Banc (Per Curiam). Service as of this date by the Clerk of Court. [1092896] [25-1812, 25-1813]" See, Dkt. Nos. 4, 6 and 7, at https://ecf.cafc.uscourts.gov/n/beam/servlet/TransportRoom?servlet=CaseSummary.jsp&incOrigDkt=Y&incDktEntries=Y&caseNum=25-1813.

So, the next pivotal date will likely be sometime in June or maybe later when the Court of Appeals makes its ruling on the merits. But then again, no matter which side losses, it will likely appeal to SCOTUS.