UPDATE: After this alert below was published, the U.S. Court of Appeals for the Federal Circuit issued a temporary administrative stay of the injunction to allow the court time to consider whether to grant a stay pending appeal. In a four-page order, the parties were directed to file all briefs on the stay issue by June 9. Tariff collection may continue for now.

In a sweeping decision released on May 28, 2025, a three-judge panel of the U.S. Court of International Trade (CIT) invalidated a broad set of tariffs imposed by President Trump earlier this year under the International Emergency Economic Powers Act (IEEPA).

The court ruled that the president’s actions exceeded the authority granted by Congress and issued a permanent injunction that takes effect immediately. "Congress did not intend IEEPA to be used as a cudgel in trade disputes or to reverse the balance of power it has historically maintained over tariffs," the panel wrote.

Beginning May 29, U.S. Customs and Border Protection must stop collecting these tariffs. Businesses that paid them may be entitled to refunds — though that process will depend on follow-up from the government and whether an appeal alters the current trajectory.

The Trump administration responded swiftly, filing a notice of appeal just hours later to the U.S. Court of Appeals for the Federal Circuit.

Where the legal challenge began

The lawsuits were filed in April directly with the CIT, which has exclusive nationwide jurisdiction over civil actions related to tariffs, trade, and customs law. Two suits were consolidated:

One was brought by a coalition of U.S. companies that import consumer and industrial products. The second suit was filed by a coalition of 13 states, led by Oregon, alleging the duties harmed state procurement and budget planning.

The decision was issued per curiam by Judges Jane A. Restani, Gary S. Katzmann and Timothy M. Reif.

What the court held

The court found that IEEPA does not grant the president unlimited power to impose tariffs. While IEEPA allows the executive to regulate trade during a bona fide national emergency, it imposes strict conditions. The administration’s sweeping use of tariffs — including up to 125 percent duties on goods from over 50 countries — was not justified under the statute and had no meaningful limiting principle.

"We do not read IEEPA to delegate an unbounded tariff authority to the President. The statutory scheme provides specific, narrow powers in the context of genuine national emergencies — not a wholesale license to override congressional control over trade," the panel wrote in a 49-page opinion.

The court struck down four of Trump's executive orders — and all of their subsequent modifications — as unlawful:

• EO 14193 (Canada: Duties on northern border imports)
• EO 14194 (Mexico: Southern border tariffs)
• EO 14195 (China: Synthetic opioid supply chain tariffs)
• EO 14257 (Global “reciprocal” tariffs tied to trade deficits)

The court emphasized that Congress alone holds the power to impose duties, and it refused to interpret IEEPA as a backdoor to unilateral tariff setting. 

What happens now? [UPDATED]

• Appeal filed: The government filed an immediate appeal to the U.S. Court of Appeals for the Federal Circuit. (UPDATE: A temporary administrative stay was granted on May 29 by the Federal Circuit that orders the parties to file briefs addressing whether the court should stay the injunction pending appeal.

What this means for businesses

The CIT ruling, if upheld by higher courts, would draw a clear line around the limits of emergency trade powers. For importers and multinational companies, the decision could open the door to recovering previously paid duties.

For more information, please contact Lizbeth R. Levinson at llevinson@foxrothschild.com or any member of the firm's International Trade Practice.

This information is intended to inform firm clients and friends about legal developments, including the decisions of courts and administrative bodies. Nothing in this alert should be construed as legal advice or a legal opinion. Readers should not act upon the information contained in this alert without seeking the advice of legal counsel. Views expressed are those of the author(s) and not necessarily this law firm or its clients. Prior results do not guarantee a similar outcome.