Unpacking the Court Rulings Against Trump’s “Emergency” Tariffs

Lori Wallach, Director, Rethink Trade

The Trump tariff rollercoaster had a new loop-de-loop in late May when two federal courts ruled against the April 2, 2025, 10% tariffs on most of the world and higher tariffs on 67 nations. The judgment by the U.S. Court of International Trade (USCIT) permanently suspended not just the tariffs, but the Executive Orders (EOs) related to them. But the next day, an appeals court stayed the ruling temporarily, meaning the tariffs and other policies enacted by the EOs remain in place for now. Ultimately, the Supreme Court will decide the merits of whether Trump can use a specific law to enact these specific tariffs and other trade policies. Separately, by mid-June, the appeals courts is expected to decide if the stay will remain in place until a final Supreme Court ruling is issued on the merits.

The May 28 Court of International Trade Ruling Invalidated All of the IEEPA Tariffs

USCIT invalidated all of the Trump tariffs based on the International Economic Emergency Powers Act (IEEPA) and issued a permanent injunction. This stopped the 10% tariffs on most countries, the higher tariffs on 67 countries subject to the 90-day pause ending July 9, and the higher Mexico-Canada-China “fentanyl” tariffs. The ruling does not touch on the Section 232 tariffs on steel/autos or the China Section 301 tariffs. The USCIT also invalidated all of the IEEPA-related Trump Executive Orders, which means undoing the termination of de minimis for China (now in effect) and the pending end of de minimis for the rest of the world. In a judgment order accompanying the slip opinion, the USCIT gave the White House ten days (i.e., until Saturday, June 7) to enact the changes.

The Administration Appealed and Now Has a Temporary Stay

Late on May 28, the administration filed a notice of appeal on the merits. Early on Thursday, May 29, administration lawyers filed an 18- page demand for a stay. Later on May 29, the U.S. Court of Appeals for the DC Circuit issued a temporary stay en banc on the USCIT judgment, allowing the IEEPA tariffs to remain in place for now and the termination of de minimis duty-free access for low-value imports from China as well. The appeals court has required final briefs on the stay by Monday, June 9, meaning it will likely issue a ruling by the end of June on whether the tariffs and de minimis phaseout will remain in place during the duration of the appeals process on the merits. Given the merits appeals will play out over some months at the fastest, the rulings on the stay will determine the actual status of the tariffs and de minimis.

The U.S. Supreme Court Will Decide Whether IEEPA Provides Authority for the Specific Tariffs Trump Has Enacted

There is no question that the legality of Trump’s IEEPA-based tariffs will be decided by the Supreme Court. But when that will happen exactly is less clear. The Supreme Court typically adjourns in late June or early July. The next term starts on October 6, 2025. Another legal fight now underway is whether the three other cases filed in federal court challenging the IEEPA tariffs will proceed. The administration has petitioned the courts to hold on those cases until the Supreme Court rules on the fundamental IEEPA authority issues.

What Comes Next?

It is quite unclear! The first fork in the road is whether a permanent stay is granted. If there is no stay, we can’t be sure what will happen on June 7. Likely the administration would appeal the stay to the Supreme Court. Will the administration end the tariffs on June 7 is there is no stay in place? And longer term, what will they do next? Some scenarios I could imagine the Trump administration might consider as they appeal this ruling include:

• Launching Section 301 investigations on all/some of the “Big 18” countries/entities now targeted for priority “tariff relief” negotiations, including the EU. These investigations could establish new, broad tariff authority applicable to numerous goods from investigated countries using a different non-IEEPA statute.
• Proceeding with more Section 232 investigations and tariffs for targeted sectors as the administration has previously indicated they will do, which would authorize tariffs on all countries for specific categories of goods.
• Using Section 122 to impose 10-15% across-the-board tariffs for the next 150 days as they work on the Section 301 and 232 processes and requirements to apply tariffs using those alternative authorities.

Hopefully using the discretion available in Section 321 of the Tariff Act of 1930 to issue a quick executive order to reinstate the termination of de minimis on China and extend it to rest of the world.

What Was the Basis of the May 28 Ruling?

For the April 2 tariffs, a very short version is that IEEPA doesn’t authorize a president to just unilaterally impose unlimited tariffs worldwide of various amounts. There is an extensive analysis of how this cannot be what IEEPA permits given Congress’ exclusive constitutional tariff authority and all presidential tariff powers relying solely on permissible delegations of Congress’ authority. Notably, the ruling is premised on IEEPA allowing a president to enact tariffs, just not unlimited ones. (The court challenges of IEEPA tariffs and some lawyers argue that IEEPA simply does not allow tariff use at all.) In explaining why IEEPA does not allow these tariffs, the USCIT ruling spotlights Congress’ action to establish a specific, more limited tariff authority for presidents to use related to trade imbalances: Section 122 of the Trade Act of 1974 allows up to 15% tariffs for 150 days for balance of payments and current account deficit crunches (i.e., the issue that had Nixon employ across-the-board tariffs in 1971, the last time it was done…). USCIT also noted that other congressional delegations of tariff authority, like Sections 301 and 232, allow presidents legal tariffs use via prescribed procedures based on required findings. (Section 232 is the basis for steel/aluminum/automobile tariffs. Section 301 is the basis for Biden’s China electric vehicle and solar tariffs and Trump’s first-term tariffs of average 19% on $350 billion of Chinese imports.) USCIT did not rule on the application of 301 or 232 to any specific situation, but it is notable that they spelled out that these are permissible means for a president to impose tariffs in contrast to what Trump did under IEEPA. So, the ruling is not anti-tariff per se. And it avoided ruling on some of the plaintiffs’ key theories. For instance, instead of doing a broad “nondelegation doctrine” analysis, the USCIT simply noted that Congress had enacted legislation explicitly about how and when tariffs can be used to address trade imbalances, and that this law, Section 122, limits whatever broader tariff authority Congress may have delegated via IEEPA. Effectively, the court ruled that Trump’s use of IEEPA for the April 2 tariff lollapalooza was so expansive and contrary to a specific trade- imbalance tariff authority grant that it just trashes Congress’ constitutional tariff authority. Even the conservative Supreme Court majority might agree.

The logic for invalidating the “fentanyl” tariffs on Mexico, Canada, and China is less compelling. The USCIT basically made up a new limitation on presidential authority by focusing on a clause in the IEEPA statute authorizing actions “that deal with” whatever the stated emergency is. The USCIT required a tight nexus of the economic action taken directly remedying the emergency declared. This is not a standard to which any non-tariff IEEPA use has been held in the past. And, in fact, the USCIT’s logic that the law does not allow economic actions that indirectly address an emergency by creating pressure on foreign governments would eviscerate the economic sanctions that are the mainstay of the numerous IEEPA actions every president takes over the course of a term.

What Is the Political Context?

The political messaging coming from White House in response is the same sort of attack on “judicial interference” that has been employed in response to the administration losing immigration-related rulings. Also, the administration has pledged to proceed with tariffs one way or another and is continuing its “tariff relief” negotiations linked to the July 9 end of the 90-day pause on higher, bespoke “reciprocal” tariffs. These negotiations have become extremely controversial as they have not focused on rebalancing U.S. trade or rebuilding American manufacturing, which is what Trump promised was the goal of his trade actions. Instead, news of deals for the president’s family, friends, and favored corporate donors emerges daily. And, to the extent U.S. economic interests at large are being prioritized, it has been Big Tech, Big Pharma and crypto not manufacturing. It remains to be seen whether the White House will use new legal strategies to impose tariffs and if so, whether being forced to use different, more targeted legal authority to do so could result in more strategic tariffs. Such an approach, paired with additional industrial policy tools and competition policy could help maintain the 2023-2024 boom in new U.S. factory construction.