On August 29, 2025, the U.S. Court of Appeals for the Federal Circuit (“the Court” or “Federal Circuit”) in a 7-4 ruling determined that President Donald Trump exceeded his authority by imposing certain tariffs under the International Emergency Economic Powers Act (IEEPA). The Court also affirmed the grant of declaratory relief of the U.S. Court of International Trade (“the lower court” or “CIT”) that the involved Executive Orders are “contrary to law.” The Court, however, vacated the lower court’s grant of a permanent injunction universally enjoining the enforcement of the affected tariffs and remanded this matter to the lower court to reevaluate the propriety of granting injunctive relief and the proper scope of such relief given a recent U.S. Supreme Court ruling restricting “universal” injunctions.
In the order accompanying the ruling, the Court stated it was withholding the implementation of its ruling until October 14, 2025, to give the U.S. government time to appeal the ruling to the U.S. Supreme Court. The Trump administration has already announced that it would appeal the Court’s findings.
The Court’s Opinion
In discussing the history and legal authority concerning the imposition of tariffs, the Court began by clearly stating that: “The Constitution grants Congress the power to ‘lay and collect Taxes, Duties, Imposts and Excises’ and to ‘regulate Commerce with foreign Nations.’ … Tariffs are a tax, and the Framers of the Constitution expressly contemplated the exclusive grant of taxing power to the legislative branch; when Patrick Henry expressed concern that the President ‘may easily become king,’ James Madison replied that this would not occur because ‘[t]he purse is in the hands of the representatives of the people.’”
In discussing the legislative history surrounding the implementation of tariffs and certain laws allowing the president to declare national emergencies and impose sanctions, the Court stated that IEEPA, 50 U.S.C. § 1701 et seq., “provides that, after declaring a national emergency pursuant to the NEA [National Emergencies Act], the President may ‘investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit, any … importation or exportation of … any property in which any foreign country or a national thereof has any interest.’ … Notably, IEEPA does not use the words ‘tariffs’ or ‘duties,’ nor any similar terms like ‘customs,’ ‘taxes,’ or ‘imposts.’ IEEPA also does not have a residual clause granting the President powers beyond those which are explicitly listed.”
In addressing the consolidated cases on appeal from the lower court, the Court makes clear that, “We are not addressing whether the President’s actions should have been taken as a matter of policy. Nor are we deciding whether IEEPA authorizes any tariffs at all. Rather, the only issue we resolve on appeal is whether the Trafficking Tariffs and Reciprocal Tariffs imposed by the challenged Executive Orders are authorized by IEEPA. We conclude they are not.”
In its ruling, the Court acknowledges that IEEPA “bestows significant authority on the President to undertake a number of actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax.” While not “deciding whether IEEPA authorizes any tariffs at all,” the Court proceeds to discuss several other statutory authorities involving tariff powers granted to the president, noting that “in each statute delegating tariff power to the President, Congress has provided specific substantive limitations and procedural guidelines to be followed in imposing any such tariff.” Instead, the Court found, “It seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs. The statute neither mentions tariffs (or any of its synonyms) nor has procedural safeguards that contain clear limits on the President’s power to impose tariffs.” Ultimately, the Court found that these other statutes indicate that whenever Congress delegates to the president the authority to impose tariffs, “it does so explicitly” and that this is not a surprise since “the core Congressional power to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution.” The Court added that the “‘basic and consequential tradeoffs’ that are inherent in the President’s decision to import the Trafficking and Reciprocal Tariffs ‘are ones that Congress would likely have intended for itself.’” Instead, the Court found that “[c]ontrary to the Government’s assertion, the mere authorization to ‘regulate’ does not in and of itself imply the authority to impose tariffs. The power to ‘regulate’ has long been understood to be distinct from the power to ‘tax.’” Reading the phrase “regulate … importation” to include imposing these tariffs is “a wafer-thin reed on which to rest such sweeping power.”
The Court’s majority also found that the government’s interpretation of its ability to implement tariffs under IEEPA runs afoul of the major questions doctrine.
The Court’s decision is lengthy and complex, and it should be read closely for further details. The decision also includes (i) a concurring opinion providing additional grounds for the lack of authorization under IEEPA for the president to impose tariffs, and (ii) a lengthy dissenting opinion.
Background on the Challenged Tariffs
This appeal concerns five executive orders regulating importation and imposing duties on foreign trading partners to address what President Trump declared as national emergencies. These executive orders – Nos. 14193, 14194, 14195, 14257, and 14266 – imposed tariffs of unlimited duration on almost all goods from nearly every country worldwide. They focused on threats originating from Canada, China and Mexico regarding the flow of narcotics and opioids into the United States (i.e., the Trafficking Tariffs). They also involve the April 2, 2025 Reciprocal Tariffs that imposed a baseline 10% ad valorem duties on imports from nearly every country with which the United States has any significant trade relationship, with additional ad valorem duties ranging from 11% to as high as 50% that were later imposed on a per-country basis. In response, lawsuits were filed arguing that the tariffs were not authorized by IEEPA.
On April 14, 2025, five small businesses brought suit before the CIT against the United States challenging the president’s imposition of the Reciprocal Tariffs. On April 23, Oregon and 11 other states brought suit before the CIT against the United States challenging the president’s imposition of both the Reciprocal Tariffs and the Trafficking Tariffs. On May 28, a three-judge panel of the CIT granted summary judgment on both cases, holding that both the Reciprocal Tariffs and the Trafficking Tariffs exceeded the president’s authority under IEEPA and permanently enjoining the U.S. government from imposing these tariffs. The U.S. government immediately appealed the cases to the Federal Circuit.
For additional information, see Thompson Hine Updates of May 30, 2025, April 3, 2025, February 4, 2025, and numerous other updates regarding modifications to these Reciprocal and Trafficking Tariffs.
Next Steps
As previously noted, the White House has already stated that the president intends to appeal this decision to the U.S. Supreme Court. Whatever the ultimate outcome, there remain, however, alternatives available to the Trump administration to implement more limited or short-term tariffs of a similar nature to those that have been implemented under IEEPA.
Even the Court in its August 29, 2025 decision noted that Congress has passed numerous other statutes that explicitly authorize the president to impose or modify tariffs on imports in certain circumstances. Although neither has ever been invoked before, two of these are Section 338 of the Tariff Act of 1930 (permitting the president to impose “new or additional duties” of up to 50% on countries that have discriminated against commerce of the United States) and Section 122 of the Trade Act of 1974 (allowing the president to impose a temporary import surcharge in the form of duties not exceeding 15% and for a period not to exceed 150 days, to address “large and serious United States balance-of-payments deficits” or other situations that present “fundamental international payments problems.”).