CIT Strikes down ‘Liberation Day’ IEEPA Tariffs
On May 28, 2025, the U.S. Court of International Trade (CIT) issued a unanimous ruling striking down President Donald Trump’s “Liberation Day” tariffs. These tariffs, announced via Executive Order 14257 on April 2, 2025, were imposed on a wide range of imports from multiple countries under the International Emergency Economic Powers Act (IEEPA) of 1977. The court found that the IEEPA does not authorize the president to use emergency powers to unilaterally impose broad tariffs, declaring the action an overreach of executive authority.
Other tariffs imposed under different powers, like so-called Section 232 and Section 301 levies, are unaffected, and include the tariffs on steel, aluminum and automobiles.
The ruling delivers a sharp rebuke to the Trump Administration’s use of national emergency declarations to circumvent congressional authority on trade policy. The CIT emphasized that the regulation of international commerce is constitutionally vested in Congress and that economic concerns like trade deficits do not meet the IEEPA’s threshold of an “unusual and extraordinary threat.”
To clarify a common point of confusion: while many in the trade space are familiar with the U.S. International Trade Commission (ITC), it is the Court of International Trade (CIT) – a federal court with nationwide jurisdiction over civil actions arising under U.S. customs and trade laws – that rendered this decision. The ITC, by contrast, is an independent, quasi-judicial agency that investigates unfair trade practices, including intellectual property violations, that may injure U.S. industries. The CIT adjudicates legal questions; the ITC conducts investigations and makes recommendations.
This case was brought by businesses and legal advocates who argued the tariffs harmed U.S. importers and consumers, and that the legal foundation underpinning the president’s actions was flawed. The CIT agreed, vacating the tariffs and enjoining further enforcement.
As a Refresher…
On April 2, 2025, President Trump announced sweeping tariffs on imports from numerous countries, citing persistent trade deficits as a national emergency. These measures, referred to as “Liberation Day” tariffs, were implemented through Executive Order 14257 and aimed to establish “reciprocal” trade terms.
These tariffs, dubbed "Trafficking Tariffs" (fentanyl tariffs) and "Worldwide and Retaliatory Tariffs," were framed as responses to national security threats including drug trafficking, immigration issues, and trade imbalances. The proposed rates were:
Trafficking Tariffs – 25% on Canadian and Mexican goods, 20% on Chinese goods (initially 10%).
Worldwide Tariffs – 10% across-the-board, with some countries facing up to 50%.
Retaliatory Tariffs – Specific escalations targeting China.
You can read more about the Liberation Tariffs in this update from Constitution Partners.
Legal Challenge & Court Decision
The tariffs faced swift legal challenges from multiple fronts. One lawsuit was filed by a group of private companies, including V.O.S. Selections and Genova Pipe, while a separate case was brought by thirteen states.
The court ruled that IEEPA does not grant the President unlimited authority to impose tariffs on imports. Instead, IEEPA is narrowly tailored to address specific “unusual and extraordinary threats” and cannot be used to circumvent Congress’s exclusive constitutional power to levy tariffs under Article I, Section 8.
Applying both the nondelegation doctrine and the major questions doctrine, the court determined that such expansive use of IEEPA would represent an unconstitutional breach of the separation of powers. The Executive Orders in question failed to articulate any intelligible principle or meaningful limits to guide their application, amounting to an unlawful delegation of legislative authority. Moreover, the court rejected the asserted national emergency justifications, finding them either insufficient or too tenuously connected to the tariffs imposed.
The Justice Department has filed a notice of appeal with the U.S. Court of Appeals for the Federal Circuit. While the U.S. Supreme Court may ultimately weigh in on this high-stakes case, the current ruling remains in effect, permanently blocking the tariffs unless the appeals court grants a stay allowing Trump to reinstate them during litigation.
In the interim, businesses should consult with legal and trade experts to assess the impact of this decision on their operations and to explore potential remedies or adjustments to their import strategies.
