WHAT DID THE FEDERAL CIRCUIT DECIDE REGARDING IEEPA FOR PRESIDENTIAL TARIFFS?
On August 29, 2025, the U.S. Court of Appeals for the Federal Circuit ruled that the International Emergency Economic Powers Act (IEEPA) does not grant the President authority to impose tariffs. The court affirmed the U.S. Court of International Trade’s earlier decision striking down Executive Orders that had established new duties on imports from Canada, Mexico, China, and nearly every other U.S. trading partner.
The case, V.O.S. Selections, Inc. v. Trump (Nos. 25-1812 and 25-1813), consolidates challenges brought by private businesses and a coalition of twelve U.S. states who argued that IEEPA was never intended to authorize tariffs of unlimited scope or duration.
WHICH IEEPA TARIFFS WERE AT ISSUE?
The decision focused on two sets of tariff measures:
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Trafficking Tariffs: Issued in early 2025 in response to the declared national emergency surrounding fentanyl and other opioids, these orders imposed 25 percent duties on imports from Mexico and Canada and 10 percent duties on imports from China, later raised to 20 percent.
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Reciprocal Tariffs: Announced in April 2025, these orders established a baseline 10 percent duty on nearly all imports, with additional country-specific duties ranging from 11 percent to 50 percent. Tariffs on Chinese products were increased in stages up to 125 percent before being reduced during bilateral talks.
Both sets of tariffs modified the Harmonized Tariff Schedule of the United States (HTSUS) that essentially added new statutory provisions without Congressional approval.
WHY DID THE COURT FIND IEEPA INSUFFICIENT?
The court held that IEEPA’s language allowing the President to “regulate importation” does not extend to creating tariffs. Unlike other trade statutes, IEEPA contains no references to “tariffs,” “duties,” or “taxes,” nor does it include procedural or substantive limits to guide such actions.
By contrast, statutes like Section 232 of the Trade Expansion Act or Section 301 of the Trade Act of 1974 provide explicit tariff authority, defined timelines, and required investigations. The decision highlighted that when Congress delegates taxing power, it includes clear boundaries and procedural requirements.
READ THE FULL INTERNATIONAL EMERGENCY ECONOMIC POWERS ACT (IEEPA) HERE: https://www.congress.gov/crs-product/R45618
WHAT DID THE COURT ORDER REGARDING NEXT STEPS?
The Federal Circuit paused further action on the case until October 14, 2025. This window gives the Government time to seek review by the U.S. Supreme Court. Until then, the lower trade court cannot move forward with implementing the ruling.
WHAT DOES THIS RULING MEAN FOR U.S. IMPORTERS?
This case reinforces that tariff-setting authority resides with Congress unless explicitly delegated. It also narrows the scope of IEEPA, clarifying that the statute is primarily intended for asset freezes, sanctions, and embargoes rather than broad customs duties.
For importers, the ruling highlights the limits of unilateral executive tariff action and signals that future efforts to impose duties outside of established trade statutes may also face judicial scrutiny.
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