The U.S. Court of International Trade (CIT) ruled in a decision on May 28, 2025, that the reciprocal and fentanyl related tariffs recently levied by the executive branch should be retroactively canceled. The basis for the court’s opinion lies in an interpretation of the International Emergency Economic Powers Act (IEEPA). According to the court, the IEEPA does not grant the President the power to impose unlimited worldwide tariffs without congressional approval.
The CIT holds that the President’s ability to levy tariffs under the IEEPA is limited to certain situations. These situations include “extraordinary and unusual” threats to the United States and the tariffs must specifically address these threats to fall under the President’s jurisdiction. In their ruling, the CIT held that the reciprocal and fentanyl related tariffs did not specifically address the emergencies declared by the President to justify the imposition of tariffs. Additionally, the CIT maintained that the tariffs were not limited enough in scope to be legally imposed by the President.
As a result, the court ordered fentanyl and reciprocal tariffs to be canceled retroactively and refunded. The court provided 10 days to end the tariffs but this could be stayed while the case goes through appeals process, first to the Federal Circuit Court of Appeals and potentially the Supreme Court. If stayed, we expect the government will continue to collect on reciprocal and fentanyl related tariffs. What impact this decision will have on trade negotiations is unknown as the Administration has other options for imposing tariffs. Note that tariffs on steel, automobiles, and aluminum under Section 232 and tariffs on China under Section 301 do not fall under this ruling and will remain in effect. The Federal Circuit Court of Appeals issued a temporary stay on the injunction until the court can hear arguments on June 9th.
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