In a landmark decision issued on May 28, 2025, the U.S. Court of International Trade declared invalid four major executive orders that had imposed sweeping additional tariffs under the International Emergency Economic Powers Act (IEEPA), namely:

• Executive Order 14257 on Regulating Imports With a Reciprocal Tariff to Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits, 90 Fed. Reg. 15041 (Apr. 2, 2025).

• Executive Order 14259 on Amendment to Reciprocal Tariffs and Updated Duties as Applied to Low-Value Imports From the People’s Republic of China, 90 Fed. Reg. 15509 (Apr. 8, 2025).

• Executive Order 14266, 90 Fed. Reg. at 15626 (raising China-specific duty rate from 84% to 125% effective April 10).

• Executive Order 14298 on Modifying Reciprocal Tariff Rates To Reflect Discussions With the People’s Republic of China, 90 Fed. Reg. 21831 (May 12, 2025).

This ruling represents the most significant judicial constraint on presidential tariff authority in decades and creates immediate uncertainty for global trade flows while potentially reshaping the legal landscape for emergency economic measures.

The second Trump administration had rapidly implemented an aggressive series of tariff measures beginning in February 2025, including 25% duties on Canadian and Mexican goods, 20% duties on Chinese products (citing drug trafficking concerns), and, as of April 2025, a universal 10% baseline tariff on imports from virtually all trading partners with country-specific rates reaching up to 125% for certain nations. As we detailed in our previous analysis, these measures represented an unprecedented expansion of executive tariff authority that raised serious questions regarding their consistency with WTO obligations and domestic legal constraints.

The Court's constitutional and statutory analysis

The Court of International Trade's opinion, delivered per curiam by a three-judge panel, advances an analysis that will likely influence future debates about the scope of presidential emergency powers in trade matters. The court's reasoning operates on two distinct but related constitutional and statutory grounds that merit careful examination.

IEEPA Section 1702: The Limits of "Regulate Importation"

The court's primary holding centers on its interpretation of IEEPA Section 1702, which authorizes the President to "regulate importation" during declared emergencies. Applying both the nondelegation doctrine and the major questions doctrine as interpretive canons, the court concluded that the phrase "regulate importation" cannot constitutionally bear the weight of unlimited tariff authority that the administration claimed.

Critically, the court distinguished the current case from the 1975 Federal Circuit decision in United States v. Yoshida International, Inc., which had upheld President Nixon's 1971 import surcharge under the Trading with the Enemy Act (TWEA). The court noted that even Yoshida II had cautioned that "whether a delegation of such breadth as to have authorized [unlimited tariffs] would be constitutionally embraced" would depend on the specific circumstances and relationship to other statutes.

The court's constitutional analysis is particularly noteworthy for its application of separation of powers principles. Rather than striking down IEEPA as unconstitutional, the court employed the constitutional avoidance doctrine to interpret the statute narrowly, concluding that "any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional". This approach allows the court to preserve IEEPA's validity while constraining its scope—a technique that may prove influential in future cases involving broad delegations of economic authority.

Congressional Intent and the Section 122 Framework

Perhaps more significantly, the court grounded its interpretation in Congress's deliberate choice to enact specific, limited tariff authorities outside the emergency powers framework. The court emphasized that Congress enacted Section 122 of the Trade Act of 1974, which provides explicit but constrained authority for the President to impose temporary import surcharges in response to "fundamental international payments problems", including trade deficits.

This statutory framework analysis reveals the court's understanding of congressional intent. The court noted that Section 122 limits presidential responses to balance-of-payments deficits to a maximum 15% surcharge for no more than 150 days. By enacting these specific constraints in non-emergency legislation, Congress effectively removed such situations from the broader emergency powers under IEEPA. The court concluded that the President's "Worldwide and Retaliatory Tariffs", imposed explicitly in response to trade deficits, must therefore comply with Section 122's limitations rather than rely on IEEPA's broader authorities.

The "Economic Security" Question

Regarding the administration's invocation of economic justifications for emergency action, the Court of International Trade's analysis focused on whether the stated justifications satisfied IEEPA's statutory requirements rather than evaluating "economic security" as a distinct legal doctrine. The court examined the President's assertion that "large and persistent annual U.S. goods trade deficits" constitute an "unusual and extraordinary threat to the national security and economy of the United States", having "its source in whole or substantial part outside the United States in the domestic economic policies of key trading partners and structural imbalances in the global trading system".

The court's constitutional analysis suggests significant constraints on using economic justifications to invoke emergency powers. Rather than directly addressing whether "economic security" can constitute an "unusual and extraordinary threat" under IEEPA Section 1701, the court applied constitutional avoidance principles to interpret the statute narrowly. The court emphasized that "any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional" and concluded that unlimited presidential tariff authority would violate separation of powers principles.

Crucially, the court determined that when Congress enacted specific, limited authorities for addressing trade imbalances through Section 122 of the Trade Act of 1974, it effectively removed such economic justifications from the broader emergency powers framework. The court noted that Section 122 limits presidential responses to balance-of-payments deficits to a maximum 15% surcharge for no more than 150 days, indicating that even 'large and serious United States balance-of-payments deficits' do not necessitate the use of emergency powers and justify only the President's imposition of limited remedies subject to enumerated procedural constraints.

This rationale reveals the court's skepticism toward using broad economic justifications to circumvent congressionally imposed limitations on presidential trade authority. The court's finding that the Worldwide and Retaliatory Tariffs deal with "large and persistent" annual U.S. goods trade deficits means they must comply with Section 122's constraints rather than rely on emergency powers. This effectively rejects the administration's attempt to use general economic security concerns to justify unlimited tariff authority.

Political Question Doctrine Rejected

The court's rejection of the government's political question doctrine defense is significant for future litigation challenging presidential trade actions. The government argued that courts lack "judicially discoverable and manageable standards" for reviewing the President's threat assessments under IEEPA.

The court firmly rejected this argument, holding that determining whether executive actions comply with statutory constraints is precisely the type of legal question courts are designed to resolve. The court emphasized that "[U]nder the Constitution, one of the Judiciary's characteristic roles is to interpret statutes, and we cannot shirk this responsibility merely because our decision may have significant political overtones".

Federal Circuit Grants Administrative Stay - Tariffs Remain in Effect

In a swift response demonstrating the high stakes involved, the U.S. Court of Appeals for the Federal Circuit issued Order 25-1812 on May 29, 2025—less than 24 hours after the lower court's decision—granting an administrative stay that reinstates all challenged IEEPA-based tariffs pending further review.

The Federal Circuit's succinct order states that "The request for an immediate administrative stay is granted to the extent that 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". This effectively pauses the 10-day rescission deadline and maintains the status quo ante while the court considers the government's motion for a longer-term stay. The court consolidated both the business plaintiffs' case and the state attorneys general case for efficiency.

Government's Strategic Response

The Trump administration's emergency appeal included strong assertions about national security imperatives. The speed of the appellate response suggests the government filed an emergency motion immediately after the CIT decision. The Trump administration has indicated preparedness with alternative legal strategies.

Even if the Trump administration's appeal results unsuccessful and the Court of International Court's declaring IEEPS tariffs invalid is upheld, even in that case, the Trump administration could potentially recourse to other legal bases (e.g. Sections 122, 232, 301, or 338) to impose additional tariffs.

Critical Upcoming Deadlines

The Federal Circuit has established a compressed briefing schedule that will determine the tariffs' fate in the coming weeks:

• June 5, 2025: Plaintiffs must respond to the government's stay motion

• June 9, 2025: Government may file consolidated reply

• Mid-June 2025: Expected timing for Federal Circuit ruling on longer-term stay

Current Status and Strategic Implications Immediate Tariff Status

All IEEPA-based tariffs affecting over $13 billion in annual trade flows remain fully in effect, including:

• 25% duties on Canadian and Mexican goods (Executive Orders 14193, 14194)

• 20% duties on Chinese products (Executive Order 14195)

• Universal 10% baseline tariffs with country-specific rates up to 125% (Executive Order 14257)

De Minimis Law has substantial experience advising clients on WTO and USMCA rules and related trade policies, including those pertaining to national security. For further updates or assistance in navigating these complex trade issues, please contact our office.

Disclaimer:

This article is for informational purposes only and does not constitute legal advice.

Resources

Court decisions:

- V.O.S. Selections, Inc. et al v. Donald J. Trump et al [2025] US CIT, Court Nos. 25-00066 & 25-00077 (available here).

- V.O.S. Selections, Inc. et al v. Donald J. Trump et al [2025] Fed Cir, Case No. 25-1812, Order dated May 29, 2025 (available here).

Executive orders:

- White House, Executive Order 14193 on Imposing Duties To Address the Flow of Illicit Drugs Across Our Northern Border (1 February 2025) (available here)

- White House, Executive Order 14194 on Imposing Duties To Address the Situation at Our Southern Border (1 February 2025) (available here)

- White House, Executive Order 14195 on Imposing Duties To Address the Synthetic Opioid Supply Chain in the People's Republic of China (1 February 2025) (available here)

- White House, Executive Order 14257 on Regulating Imports With a Reciprocal Tariff To Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits (2 April 2025) (available here).