Court of international trade strikes down trump tariffs

On May 28, 2025, the US Court of International Trade (CIT) issued a unanimous ruling that the fentanyl and reciprocal (“Liberation Day”) tariffs, as laid out in the International Emergency Economic Powers Act (IEEPA) exceed the president’s authority and were illegal. If the court’s ruling holds, it would eliminate around 90 percent of the overall tariff costs imposed by the Trump Administration since January.

All three judges found that the IEEPA tariffs were illegal and further concluded that the IEEPA tariffs should be declared unlawful to all importers, not just the Plaintiffs in order to ensure uniformity.

The Trump Administration immediately appealed to the Federal Circuit (CAFC) to argue that it maintains authority to continue collecting the tariff revenue.

The IEEPA tariffs at issue are (1) the 20% fentanyl-related tariffs on Chinese products and the fentanyl/immigration-related tariffs of 25% tariff on non-originating Canadian and Mexican products (10% on certain energy products and potash), which both started in February of this year, and (2) the reciprocal tariffs that started in April of this year, which are currently at 10% until early July 9 for most countries, but 10% for China until August 12 - but were previously as high as 125% for China. Also included would be the China de minimis tariffs.

The Trump Administration immediately filed an appeal, as well as a "stay of execution." This means the government asked the CIT to preserve the status quo until the appeals process is complete (tariffs would remain in place if the stay were granted).

Late this afternoon, the U.S. Court of Appeals for the Federal Circuit lifted the initial block imposed by the CIT. The new order read “The judgments and the permanent injunctions entered by the Court of International Trade in these cases are temporarily stayed until further notice while this court considers the motions papers.”

The appeals bench also set a briefing schedule through June 9 for the parties to lay out their arguments. The court will then rule whether to grant a longer pause.

Unless the appeals court (CAFC) and/or the Supreme Court "fast track" the appeal, any appeal could take another 1 to 2 years. The CAFC appeal process can take a few months, and it is anticipated that it is likely this will end up at the Supreme Court. The Supreme Court’s current session ends in June and the new session begins the first Monday in October, which give us a sense of what the timelines may look like.

If the CIT agrees to issue a "stay" (maintain the status quo) - the government will continue to collect the IEEPA tariffs while the appeals process runs its course. Importers will need to continue paying the tariffs during that time.

What else did the cit order in this ruling?

The CIT also ordered the government to take administrative measures (such as CSMS Messages) to implement the CIT's decision (i.e., to terminate the tariffs) in the next 10 days. It is not anticipated that CBP will terminate the requirement that importers pay the tariffs any time soon. This will likely only happen if the CIT denies the government's request for a stay of the judgment.

The CIT did not order the government to issue refunds to every importer - it only ruled that the IEEPA tariffs are illegal for all importers. The Plaintiffs in this case did ask for refunds/damages, but the court did not order them in their ruling (the Plaintiffs will be following up with CIT on this item). Although no one knows what direction this will ultimately take, it is possible given the amount of money at stake for the government, that CBP will not voluntarily refund tariffs to all importers - either now or at the end of the appeals process (assuming the government loses all of its appeals). Unless a court order directs the government to refund tariffs back to day one, it is possible that refunds would only apply from the date of the final ruling.

One possible outcome is that importers would have to file their own individual refund lawsuits. Protests and post summary corrections (PSCs) could also potentially be refund vehicles for importers. Importers should check with customs counsel for guidance on how to best preserve their rights to a refund in the event the CIT decision is upheld.

The CIT decision does not strike down or eliminate any tariffs that are not IEEPA tariffs. This means the Section 232 (auto/auto parts, aluminum/steel, etc.) and Section 301 tariffs remain in place. Depending on the outcome of the appeals, we could see an increase in the Section 232/301 actions by the Administration as it looks for alternative options to impose tariffs.

Currently, all provisions of HTSUS Chapter 99 imposing these tariffs remain in effect, and imports should be declared under the applicable tariff provisions with duty payments pending the outcome of the appeal unless a future court order says otherwise. Additionally, it is anticipated that the restrictions preventing use of the de-minimis provision for goods subject to IEEPA tariffs will remain in effect during the appeals process.

At a minimum, importers should identify all entries where IEEPA duties were paid, track their liquidation status, and make sure that they have an audit trail of applicable documentation on those transactions.

The CIT court case is just one of a number of cases under judicial review regarding the tariffs. Today a D.C. District Court ruled that President Trump exceeded his authority when imposing blanket tariffs on imports from US trading partners, including those rooted in the International Emergency Economic Powers Act (IEEPA). The court invalidated these tariffs, stating that Trump's orders "exceed any authority granted to the president ... to regulate importation by means of tariffs". The court's decision also found that the IEEPA does not allow the president to "impose unlimited tariffs on goods from nearly every country in the world". The court's ruling has halted the tariffs (for the two specific plaintiffs) and issued a permanent injunction, requiring the government to respond within 10 days. The Administration has already appealed the ruling.

The fight over Trump’s use of IEEPA tariffs currently remains unresolved, leaving U.S. importers in a continued state of uncertainty.

To learn more about how the ONESOURCE Global Trade suite of tools and services can help businesses analyze potential impacts, explore alternative sourcing options, and optimize their trade operations to mitigate risks and capitalize on potential advantages, please contact your Account Manager or Customer Success Manager.