What Happened:
Late Friday afternoon the Court of Appeals for the Federal Circuit (CAFC) ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose some of the tariffs he has ordered on imported goods under IEEPA authority. While this decision will still likely be examined by the Supreme Court, both the U.S. Court of International Trade (CIT) and the CAFC have now opined that the tariffs were not legally authorized.
The ruling covers:
- IEEPA reciprocal tariffs
- IEEPA fentanyl tariffs (China)
- IEEPA fentanyl border tariffs (Canada and Mexico)
The ruling was not, however, all good news. The CAFC also sent the matter back to the CIT to consider whether the relief should be limited only to those parties that went to Court, and whether the CIT can issue a “universal” injunction (enjoining the Government from applying IEEPA tariffs to any U.S. imports) in light of the Supreme Court’s decision in Trump v. CASA, Inc., 145 S. Ct. 2540 (2025). If the CIT were to change the nature of the relief, it could mean that the tariffs would remain in effect and/or refunds would be delayed or even avoided, for those parties not in Court.
To implement this, the CAFC issued a separate order pausing the remand back to the CIT until October 14, allowing time for the Administration to appeal to the Supreme Court.
What’s Next:
The Administration has confirmed that it will seek review by the Supreme Court. In the meantime, the CAFC’s ruling does NOT change the current collection of IEEPA tariffs. Even if the Supreme Court ultimately rules against the Administration in the case, there are other avenues the Administration may pursue to impose tariffs, although they will likely be prospective in nature.
For example, Section 122 of the Trade Act of 1974 permits the President to impose temporary quotas and tariffs to address balance-of-payment deficits.
What Importers Should Do:
Importers should take proactive measures to protect their ability to seek refunds if the IEEPA tariffs are ultimately found to be unlawful. Although it remains unclear how CBP will handle refunds, it is likely that once an entry is liquidated and the liquidation becomes final, CBP will not grant a refund of duties paid, regardless of the outcome of the litigation. It may also be the position that CBP only has to grant refunds to those parties that have a Court order ordering the refund.
Importers should:
- File Suit in the CIT. File a preventative Court Challenge in which the lack of legality of the Tariffs is presented on behalf of specific importers. This would be filed on a prospective basis and would not wait for the liquidation of an entry and the denial of a protest. This would mean that if the Tariffs are ultimately struck down, but only for those that are in Court, you would also benefit from the ruling without having to pursue a long additional post-decision process.
- Monitor liquidation dates closely. CBP must continue liquidating entries unless directed otherwise, so importers should track when each entry, especially those subject to IEEPA tariffs, is scheduled for liquidation.
- File protests on liquidated entries. If an entry has been liquidated, importers should submit a formal protest promptly to argue that IEEPA duties were unlawful. Properly filed protests preserve their right to a refund and pave the way for judicial review if needed.
- Seek extensions or delayed liquidation when feasible. Importers may request liquidation extensions or delay the process for entries impacted by IEEPA tariffs, which may buy time and help maintain eligibility for refunds, especially if “good cause” can be shown.
- Maintain thorough records. Proper recordkeeping will be essential in a future administrative process to recover duties paid. Missing entry summaries or proof of duty payments could jeopardize refunds.
Importers are faced with a two-part question:
- You can file your own Court case and thus expedite your relief in the event that the Courts limit the nature of the relief and the United States puts up further barriers.
- You can wait for the Courts to act, and you may receive your relief, even if delayed
Diaz Trade Law can assist importers with preserving their opportunity for duty refunds while the IEEPA case is pending. Contact us today to learn more. 305-456-3830 or [email protected].
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