Federal Court Blocks Trump's Tariffs; Court of Appeals Pauses Ruling

In two days, the US Court of International Trade and the US Court of Appeals for the Federal Circuit decided on the legality of the Trump Administration's imposition of tariffs under the International Emergency Economic Powers Act (IEEPA).

While one decision underscored that President Trump had exceeded his authority, the other halted that decision from taking effect until the appeal is decided.

Background of the Dispute and Implications of the Decisions

On May 28, 2025, the US Court of International Trade (CIT) announced its decision, determining that President Trump had acted beyond his authority and that Congress had not authorized him to impose tariffs under the IEEPA. 

Moreover, CIT concluded that Trump did not have the authority to impose unrestricted global tariffs, blocking the 10% global rate and the higher per-country tariff rates currently subject to a 90-day pause, as well as tariffs on Mexico, Canada, and China in response to migration and drug smuggling. The CIT added that tariffs do not deal with the threats of migration and drug smuggling.

The day after this decision, the US Court of Appeals for the Federal Circuit (CAFC) issued an administrative stay to block the enforcement of the decision made by the CIT, and temporarily reinstated specific tariffs. The administrative stay will remain in effect until the Trump Administration appeals against the CIT's decision.

Therefore, the long-term implications for US trade policy remain unclear as the legal challenge over the IEEPA tariffs moves through the appeals process. Nevertheless, other tariffs, those implemented before the 2025 Inauguration Day, are part of a separate case still pending before the CAFC, and sector-specific tariffs imposed on steel, aluminum, and automobiles are not affected by these rulings.

Conclusion

These claims against the Trump Administration were brought in two separate cases by the impacted small businesses, V.O.S. v. United States, and a coalition of US state governments, Oregon v. United States. The CIT merged and made a single consolidated decision, which is now being challenged through an appeal. 

Considering that the State of California independently filed a lawsuit in Federal Court challenging President Trump's authority to enact tariffs unilaterally, businesses should emphasize monitoring the outcome of these cases. Additionally, due to the rapid changes in tariff policies, companies should be ready to adapt to changes in tariff structures.

Source: EY - Federal Court blocks Trump Administration IEEPA tariffs, EY - Court of International Trade rules tariffs under International Emergency Economic Powers Act unlawful; appeals court temporarily reinstates tariffs as case proceeds, VATabout