Second Federal Court Determines IEEPA Tariffs Likely Invalid

On May 29, 2025, the U.S. District Court for the District of Columbia (USDC-DC) issued a preliminary injunction ruling staying the imposition of President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA). This preliminary injunction applies to tariffs that would be paid by the two named plaintiffs – Learning Resources, Inc. and hand2mind, Inc. The tariffs enjoined are those that have been implemented against Canada, China, and Mexico (IEEPA tariffs for the flow of illicit drugs distributed in the United States; see Update of February 3, 2025) and the reciprocal tariffs (IEEPA tariffs of 10% on all countries and additional duty rates on specific countries; see Update of April 3, 2025). In the opinion, Judge Rudolph Contreras stated that, “This case is not about tariffs qua tariffs. It is about whether IEEPA enables the President to unilaterally impose, revoke, pause, reinstate, and adjust tariffs to reorder the global economy. The Court agrees with Plaintiffs that it does not.”

This is the second ruling in less than a day to find that President Trump likely exceeded his authority in issuing the Executive Orders implementing these tariffs. See also Update of May 29, 2025 providing details on ruling by the U.S. Court of International Trade (CIT). In this USDC-DC opinion, several specific issues were addressed:

1. The Court denied the government’s request to transfer the case to the CIT stating that it must look to IEEPA’s text to determine whether it is a law providing for tariffs. Noting that IEEPA does not use the words “tariffs” or “duties,” and that there is no residual clause granting the President powers beyond those expressly listed, the opinion notes that, “Every time Congress delegated the President the authority to levy duties or tariffs in Title 19 of the U.S. Code, it established express procedural, substantive, and temporal limits on that authority.” Concluding that such “comprehensive statutory limitations would be eviscerated if the President could invoke a virtually unrestricted tariffing power under IEEPA,” the Court states that because “IEEPA is not a ‘law . . . providing for tariffs,’ this Court, not the CIT, has jurisdiction over this lawsuit.”
2. Based on this analysis, the Court found that “because IEEPA does not authorize the President to impose tariffs, the [IEEPA] tariffs … are ultra vires {i.e., ‘beyond the powers’ requiring legal authority]” and the plaintiffs are likely to succeed with their claim that President Trump in implementing them violated the Administrative Procedures Act.
3. Because the plaintiffs established that they will likely suffer irreparable harm absent a preliminary injunction because the tariffs “pose an existential threat to their businesses,” the judge issued a temporary injunction for the two plaintiffs (small family-owned educational toy companies) indicating that such an action “will have virtually no effect on the government” and that without a preliminary injunction, “Plaintiffs will sustain significant and unrecoverable losses.” The Court has stayed operation of the preliminary injunction for 14 days to allow for an appeal.

This ruling is limited in scope to the named plaintiffs. It should also be noted that this ruling does not invalidate tariffs implemented by President Trump under Section 301 of the Trade Act of 1974 and under Section 232 of the Trade Adjustment Act of 1962.