U.S. Court of International Trade Blocks Certain Tariffs
The U.S. Court of International Trade (CIT) recently issued a significant ruling, declaring the tariffs imposed under President Trump’s “Liberation Day”, as unconstitutional. But what exactly does this mean – and how could it impact you as a shipper?
Ruling details:
On Wednesday, May 28th, a panel of three CIT judges ruled that the President lacked the authority to impose these reciprocal tariffs under the International Emergency Economic Powers Act (IEEPA), the court said, “IEEPA did not authorize any of the Worldwide, Retaliatory or Trafficking” orders. According to the court, such actions require Congressional approval. The full ruling can be found, here.
This decision follows a wave of lawsuits filed by several small businesses and a handful of U.S. states. The plaintiffs argued that President Trump overstepped his executive authority, citing Article I of the Constitution, which grants Congress the exclusive power to regulate trade and impose tariffs.
The Trump Administration has appealed the ruling to the U.S. Court of Appeals for the Federal Circuit. Then, on Thursday, May 29th, the Court of Appeals allowed a temporary stay of the CIT’s decision and injunctions. This allows President Trump to continue to collect tariffs while he appeals the U.S. CIT’s decision.
What does this mean for shippers:
Here’s a few things shippers should be aware of:
- This ruling impacts the 30% duty on Chinese goods, 25% on imports from Mexico/Canada, and the 10% universal baseline tariff. It does not impact tariffs under other authorities such as Section 232 on autos, steel and aluminum. Which again adds another level of trade uncertainty.
- If upheld, this ruling may open the door for potential refunds or policy reversals affecting past and current tariff-related costs. What this could mean for you: review past tariff payments for possible recourse, monitor future changes in trade policy, and adjust import strategies to prepare for increasing regulatory oversight.
- If the appeal is not successful, there are other ways the Administration could try and increase tariffs. Leading to more uncertainty and various outcomes.