A three-judge panel of the United States Court of International Trade late Wednesday afternoon struck down the reciprocal tariffs imposed last month by the Trump administration. The court, in a per curiam decision, held that the powers delegated to the President under the International Emergency Economic Powers Act of 1977 (IEEPA) do not confer the “unbounded authority” to “impose unlimited tariffs on goods from nearly every country in the world.” V.O.S. Selections, Inc., et al. v. United States, No. 25-00066 (V.O.S.) and The State of Oregon, et al. v. United States, No. 25-00077 (States), slip op. at 3 (Ct. Int’l Trade May 28, 2025)
The IEEPA delegates emergency authority to the President to regulate certain economic transactions in a national emergency. It was enacted as a more limited replacement for the 1917 Trading with the Enemy Act (TWEA). Since IEEPA’s enactment, its powers have been frequently invoked for increasingly lengthy periods by presidential administrations from both sides of the political spectrum. However, IEEPA had never been used to impose tariffs on imports rather than restrict some or all trade with a particular trading partner, often at war with (or close to war with) the United States.
In April, the plaintiffs, in two separate actions (one by the five private parties in V.O.S. and another by twelve States plaintiffs), sued the government and challenged the Executive Orders issued by the President to impose tariffs on goods from both specific countries and from all other trading partners. The court heard oral arguments in both cases earlier this month.
In its detailed decision Wednesday afternoon, the trade court divided the Executive Orders into “Worldwide and Retaliatory” tariff orders and “Trafficking” tariff orders depending on their stated rationale and objectives. The opinion states that the “Worldwide and Retaliatory” orders fall “outside the bounds of Congress’s delegation of authority to the executive branch,” while the “Trafficking” orders do not “deal with an unusual and extraordinary threat” as required by statute. The result is that the challenged orders were vacated and their operation permanently enjoined.
If the decision is upheld, the government may have to pay back duties it has already collected. In the interim, expect U.S. Customs and Border Protection to suspend enforcement of additional duties imposed against Canada, Mexico, China and, to a lesser extent, all other U.S. trading partners, including those expected to go into effect July 9 in the absence of negotiated trade agreements.
The Justice Department has already filed an appeal seeking review of the decision by the full court, and there is every reason to believe the case will eventually be heard by the Supreme Court. Miles & Stockbridge’s International Trade and Investment Regulation team will continue to monitor the appeal and is available to answer questions about what Wednesday’s opinion means for businesses.
Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.
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