This obscure New York court is set to decide fate of Trump's tariffs

Mint

11-05-2025

The Trump administration's global tariffs face their first major legal test this week when a little-known Manhattan court considers one of the president's most sweeping assertions of executive power.
A three-judge panel at the Court of International Trade will hear arguments Tuesday on whether to halt the levies, which have unleashed a trade war with the world and threaten to upend the global economy.
The federal court, which has nationwide jurisdiction over tariff and trade disputes, operates for the most part in obscurity, rarely garnering a mention in major publications and staying off the radar of most attorneys.
'Most lawyers will get out of law school without knowing that it exists," said Lawrence Friedman, a partner at law firm Barnes, Richardson & Colburn LLP who specializes in litigation at the court.
The court will step into the limelight this week in a lawsuit brought by New York-based wine importer V.O.S. Selections and four other small businesses who say President Trump doesn't have the authority to impose the tariffs. Other challenges have been filed in the court and in federal district courts around the country, but the V.O.S. case is front and center so far.
Trump unveiled his 'Liberation Day" tariffs in early April, placing 10% levies on every nation. He imposed even higher rates on many countries he deemed 'bad actors," but later announced a 90-day pause on those duties. China wasn't included in the moratorium; instead Trump ratcheted up its tariffs to 145%. The president invoked the International Emergency Economic Powers Act, a 1970s-era law known as IEEPA, in imposing the sweeping tariffs, saying trade deficits had hobbled the U.S. economy and created a national emergency.
The Court of International Trade is no different than any other district court in the U.S., although it has a few quirks. Congress created it in 1980 as a successor to the U.S. Customs Court, which operated for decades in Manhattan when New York City was the busiest harbor for imports in the country.
The stout, box-shaped glass courthouse is located in an area of lower Manhattan with many government buildings and state and federal courthouses. There are currently 14 judges serving on the court, appointed by six different presidents. Their bread-and-butter cases involve challenges to trade remedies aimed at addressing foreign companies that engage in unfair practices that hurt domestic producers, such as selling products at less than fair value. Importers also come before the court to challenge duty assessments they believe are incorrect.
Recent cases have focused on topics including fish oil imports, mattresses from Vietnam and phosphate fertilizers from Morocco.
Typically, a single trade judge presides over a case, but a three-judge panel will hear cases that raise constitutional questions or have significant implications.
The Liberty Justice Center, a libertarian public-interest litigation firm, is representing V.O.S. Its lawyers say IEEPA doesn't give the president the power to impose tariffs, which is a responsibility for Congress. 'IEEPA does not even mention tariffs," they wrote in a court brief. Also no emergency exists, they say, as U.S. trade deficits have persisted for decades without causing economic harm.
If the panel finds the emergency economic powers law does allow the president to impose tariffs, that conclusion would force the court to face far-reaching constitutional issues that could further embolden Trump if he wins.
The plaintiffs argue that Congress can't just delegate its legislative authority to the president. 'If there are any constitutional limits to delegation at all, they apply here, in a case where the executive claims virtually limitless authority to impose massive tax increases and start a worldwide trade war," they said in their lawsuit.
The Justice Department argues the president has historically conducted foreign affairs and ensured national security through the regulation of trade. In approving IEEPA, Congress validly delegated authority to the president to regulate imports during emergencies, the department says.
'When it comes to foreign affairs, broad grants by Congress of discretion to the Executive are common," the department wrote in a court brief. The government also argued that Trump's declaration of an emergency was a political question that can't be second-guessed by the judiciary.
A loss for the president could scramble much of his trade agenda and affect how other countries negotiate with the U.S. If Trump ultimately is barred from imposing tariffs under IEEPA, there are a variety of other statutes he might try to use to accomplish something similar, though none provide as open-ended and expansive authority as he claimed here.
The panel hearing the V.O.S. case includes Timothy Reif, a Trump-nominated judge who is a Democrat with a reputation as a protectionist. He previously served as general counsel for the office of the U.S. trade representative during President Barack Obama's administration.
Another panelist is Judge Gary Katzmann, a former federal prosecutor and state appeals court judge in Massachusetts whom Obama nominated to the trade court and is known for taking a scholarly approach to scrutinizing cases. The third, Judge Jane Restani, was appointed to the court by President Ronald Reagan in 1983 and previously served as the court's chief judge.
The tariffs—and Trump's sudden shifts in how and when he deploys them—have kept the small community of trade lawyers on their toes. Some wake up checking for new executive orders or changes to tariff rates to keep their clients apprised. Many expected Trump to use IEEPA to impose tariffs, but not to this extent.
So far, less than a dozen cases challenging the tariffs have been filed in federal courts. The plaintiffs have been smaller companies that say the tariffs will have a significant impact on their businesses, as well as Democratic state attorneys general who say their governments will have to pay more for equipment and supplies. Larger companies, fearful of reprisals if they challenge Trump in court, are taking a wait-and-see approach, knowing that they have up to two years to file their challenge. They are also better suited to weathering the financial burden of the levies, trade lawyers said.
'I think filing is something they want to do as a last resort," said trade lawyer Lewis Leibowitz.
While the trade court has jurisdiction over tariffs, some plaintiffs have taken their challenges to district courts instead, arguing they aren't bound to file in the specialized New York court because Trump improperly relied upon a law that isn't about tariffs at all. If district judges agree, that would be a considerable blow to the administration.
The government has asked district courts hearing the tariff challenges to transfer them to the trade court, arguing that body has sole jurisdiction to ensure that decisions on these matters are carried out uniformly.
Write to James Fanelli at [e-mail]