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Jun 1, 2025  |  
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Andrew Stuttaford


NextImg:The Corner: Tariff Hikes: In a IEEPA Trouble

The extent of the “emergency” tariff-raising power claimed by the president did not impress the court.

Well . . .

A ruling of , uh, some interest from the U.S. Court of International Trade, which has jurisdiction over “civil actions arising out of the customs and international trade laws of the United States.”

An extract:

The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs. The Trafficking Tariffs fail because they do not deal with the threats set forth in those orders. This conclusion entitles Plaintiffs to judgment as a matter of law; as the court further finds no genuine dispute as to any material fact, summary judgment will enter against the United States. See USCIT R. 56. The challenged Tariff Orders will be vacated and their operation permanently enjoined. [Emphasis added.]

As a result, most of the tariff hikes (see below) are set aside.

The ruling was unanimous (3–0). The three judges were, respectively, Reagan, Obama, and Trump appointees.

Reversing the tariffs would be a positive development, both economically and as a matter of maintaining the constitutional order. So far as the latter was concerned, the extent of the “emergency” tariff-raising power claimed by the president did not impress the court:

The President’s assertion of tariff-making authority in the instant case, unbounded as it is by any limitation in duration or scope, exceeds any tariff authority delegated to the President under IEEPA.

Nor did the administration’s effort to argue that the president’s decision could not be, as it were, second-guessed:

By the Government’s telling, the court cannot ever question the President’s assertion that his IEEPA authority “deal[s] with an unusual and extraordinary threat.”

Essentially, there’s shock and awe, and then there’s the law.

CNN:

The order halts Trump’s 30% tariffs on China, his 25% tariffs on some goods imported from Mexico and Canada, and the 10% universal tariffs on most goods coming into the United States. It does not, however, affect the 25% tariffs on autos, auto parts, steel or aluminum, which were subject to Section 232 of the Trade Expansion Act – a different law than the one Trump cited for his broader trade actions.

Stock futures surged on the ruling. Dow futures rose nearly 500 points, or 1.1%. The broader S&P 500 futures were up 1.4%, and Nasdaq futures were 1.6% higher in afterhours trading.

The judgment is being appealed.

Importers (who are — it’s too often forgotten — frequently also exporters) affected by the decision will naturally be pleased, but they also know that, if the administration does not back down (and there is no sign that it will), they can look forward to a period of uncertainty until the issue is resolved. The response to that uncertainty will be, I would imagine, to pull in their horns. To take one out of many possible examples, do companies go ahead with plans to rearrange their supply chains to deal with higher tariffs, or do they put them on ice, or do they go ahead with them, at least to a degree, because even if the new tariffs are permanently quashed, tariff risk clearly remains?

Questions, questions . . .