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Yahoo
29-05-2025
- Business
- Yahoo
Appeals court halts trade court's tariff injunction: What it means for freight
By Matthew Leffler The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates. In a seismic ruling on Wednesday, the United States Court of International Trade (CIT) delivered a stinging defeat to President Donald Trump's aggressive tariff policies, striking down a series of import duties imposed under the International Emergency Economic Powers Act (IEEPA). The cases, V.O.S. Selections, Inc. v. United States and Oregon v. United States, challenged Trump's Worldwide, Retaliatory and Trafficking Tariffs, which slapped duties as high as 25% on goods from Canada, Mexico and China, and 10% globally. The CIT's decision, calling the tariffs an unconstitutional overreach, has sent shockwaves through the freight forwarding, trucking and logistics sectors. Here's what happened, why it matters and what's next for global trade. Since taking office in January, Trump has leaned heavily on tariffs to address trade deficits and drug trafficking, invoking IEEPA — a 1977 law granting presidents emergency economic powers — to bypass Congress. The Worldwide and Retaliatory Tariffs, rolled out via Executive Order 14257 in April, imposed a 10% duty on all imports, with higher rates (up to 50%) targeting 25 countries, including a tit-for-tat escalation with China peaking at 125% before settling at 20%. The Trafficking Tariffs, launched in February, hit Canada and Mexico with 25% duties and China with 20%, ostensibly to pressure those nations to curb drug tariffs disrupted supply chains, jacked up costs for importers and sparked fears of retaliatory trade barriers. V.O.S. Selections, a group of small businesses, and a coalition of 12 states led by Oregon, argued the tariffs were an illegal power grab, violating IEEPA's limits and Congress' exclusive authority over commerce under Article I of the Constitution. The CIT agreed, handing plaintiffs a clean sweep on summary judgment. The CIT's 49-page opinion, authored by a three-judge panel, dismantled the tariffs on two fronts. First, it ruled that the Worldwide and Retaliatory Tariffs, aimed at fixing trade deficits, fell under the Trade Act of 1974's Section 122, which caps tariffs at 15% for 150 days to address balance-of-payments issues. Trump's open-ended, globe-spanning duties blew past those limits, rendering them 'ultra vires' (beyond legal authority). The court noted that IEEPA, while allowing the president to 'regulate importation' during emergencies, doesn't override specific trade laws like Section 122, especially after Congress tightened IEEPA in 1977 to curb executive overreach. Second, the Trafficking Tariffs flunked IEEPA's requirement that actions 'deal with' an 'unusual and extraordinary threat' (50 U.S.C. § 1701). The court found the tariffs, which blanket entire economies rather than targeting trafficking networks, were more about creating 'leverage' than directly addressing the drug crisis. 'Customs's collection of tariffs on lawful imports does not evidently relate to foreign governments' efforts 'to arrest, seize, detain, or otherwise intercept' bad actors,' the court wrote, rejecting the government's argument that economic pressure alone satisfies IEEPA. Crucially, the CIT rejected the government's claim that the tariffs were immune from review under the political question doctrine. The court held that interpreting IEEPA's statutory limits is a judicial task, not a blank check for the president. Citing Youngstown Sheet & Tube Co. v. Sawyer (1952), the court emphasized that executive actions incompatible with Congress' will are at their 'lowest ebb' of freight forwarders, truckers and logistics providers, the ruling is a short-term win. The tariffs, which spiked costs for imported goods like Canadian potash, Mexican auto parts and Chinese electronics, strained cash flow for businesses like V.O.S. Selections, which reported reduced inventory and canceled orders. Genova Pipe, another plaintiff, faced higher raw material costs, while MicroKits warned it might shutter without relief. The CIT's permanent injunction, effective immediately, halts these duties, easing pressure on supply chains already battered by a protracted freight recession. But don't pop the champagne yet. The ruling invites appeal to the Federal Circuit and eventually the Supreme Court, where the administration could argue for broader IEEPA powers. Trump's trade team, led by U.S. Trade Representative Jamieson Greer, may also pivot to narrower tariff schemes under Section 301 or Section 232, which allow duties for unfair trade practices or national security threats but require rigorous investigations. Retaliatory tariffs from trading partners, like China's response to the Retaliatory Tariffs, could linger, complicating cross-border freight. The CIT's decision is a wake-up call for Trump's trade agenda. By leaning on IEEPA, the administration sidestepped the procedural hurdles of trade statutes, betting on emergency powers to reshape global commerce. The court's rebuke underscores that Congress, not the president, holds the reins on tariffs — a principle rooted in the Constitution's commerce clause. For shippers, the ruling means lower import costs for now, but vigilance is key. Canada and Mexico, vital U.S. trade partners under the United States-Mexico-Canada Agreement, may push for exemptions or trade concessions, impacting trucking routes and border wait times. China's role as a manufacturing hub ensures its goods will remain a flashpoint, with or without tariffs. Freight forwarders should brace for volatility as the administration recalibrates. Longer term, the case could prompt Congress to tighten IEEPA further, echoing post-Watergate reforms that curbed executive power. Until then, the freight industry must navigate a trade landscape where legal battles are as critical as load boards. As one plaintiff, Terry Cycling, put it, these tariffs cost them $25,000 in unplanned duties this year alone. For an industry running on thin margins, that's a hit nobody can afford. On May 29, 2025, the United States Court of Appeals for the Federal Circuit issued a nonprecedential order consolidating two appeals from the United States Court of International Trade, where judgments were entered against the United States. The Federal Circuit granted the United States' motion to consolidate the appeals, requiring a single set of briefs, and issued a temporary administrative stay of the Court of International Trade's judgments and injunctions pending further consideration of the United States' stay motions. Looks like tariffs are back on the menu. The plaintiffs were directed to respond to the stay motions by June 5, 2025, with the United States permitted to file a consolidated reply by June 9, 2025, and the parties were instructed to inform the court of any actions taken by the Court of International Trade regarding the pending stay motions. Make no mistake, the outcome of this case will be decided before the Supreme Court of the United States. This is a (quickly) developing case. Matthew Leffler is a trucking industry expert and an adjunct professor of law at Michigan State University College of Law. He can be reached at matthew@ faces federal lawsuit over broker transparency dispute The courts are unlikely to end the trade war Court blocks Trump's 'Liberation Day' tariffs, calls them unconstitutional The post Appeals court halts trade court's tariff injunction: What it means for freight appeared first on FreightWaves.
Miami Herald
29-05-2025
- Business
- Miami Herald
US court blocks Trump's sweeping tariffs
A federal court on Wednesday blocked many of President Donald Trump's sweeping tariff executive orders, saying the president overstepped his use of emergency powers to enact them. The United States Court of International Trade issued an injunction on four executive orders that called upon various national emergencies to enact tariffs on Canada, China and Mexico, and a 10% global tariff plus additional reciprocal tariffs. The injunction called for the government to stop any operations related to those tariff orders, and to issue administrative notices on the permanent injunction within 10 days. Lawyers representing the Trump administration quickly appealed the decision to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., and have 14 days to file additional documents supporting their case. The injunction came as the result of several legal cases wherein a few small businesses and several U.S. states filed separate but similar petitions to halt the tariffs, arguing their imposition via the International Emergency Economic Powers Act overstepped presidential powers. The court eventually sided with the plaintiffs and ruled it was appropriate to block the executive orders that imposed the tariffs as a result. "The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs," the court panel's opinion reads. "The Trafficking Tariffs fail because they do not deal with the threats set forth in those orders." Beyond broad tariffs on trading partners, Trump also used the IEEPA as the basis to eliminate the de minimis exemption for imports from China and Hong Kong. The White House plans to end de minimis treatment for other countries' products under the act, once systems are in place to collect the additional duties. Those changes are now in question, too, as a result of the court's decision to halt the executive orders that enabled them. However, tariffs on automobiles, auto parts, steel and aluminum products were not affected by the injunction, as they were implemented under a different trade authority: Section 232 of the Trade Expansion Act. Similarly, any tariffs implemented under Section 301 will remain in place. Trump is not the first president to have used emergency powers to impose tariffs, per an April report by the Congressional Research Service, although his authority to do so was always in question. In 1971, President Richard Nixon imposed a global 10% tariff to address a national emergency related to the country's economic position. However, Trump's use of emergency powers is different in a few ways. First, the president has used emergency powers more broadly, claiming crises on immigration, fentanyl trafficking, and disproportionate trade relationships as distinct emergencies justifying new tariffs. Second, the report notes the law Nixon used was since reformed into the IEEPA - the law used by Trump - and that, therefore, the IEEPA's use for tariffs had so far been legally untested. "IEEPA authorizes the President to 'regulate' a variety of international economic transactions, including imports. Whether 'regulate' includes the power to impose a tariff, and the scale and scope of what tariffs might be authorized under the statute, are open questions as no President has previously used IEEPA to impose tariffs," Christopher A. Casey, analyst in International Trade and Finance for the Congressional Research Service, wrote in the report. The U.S. Court of International Trade was established by the Constitution and has nationwide jurisdiction over civil actions arising out of customs and trade laws in the country, according to the court's website. A federal appeals court can review its decisions. However, several Trump administration officials put out statements criticizing the courts' action to halt tariffs. White House Deputy Chief of Staff Stephen Miller, for example, said on X: "The judicial coup is out of control." And, in a statement posted on X, White House spokesperson Kush Desai said: "It is not for unelected judges to decide how to properly address a national emergency." Copyright 2025 Industry Dive. All rights reserved.
Yahoo
29-05-2025
- Business
- Yahoo
US court blocks Trump's sweeping tariffs
This story was originally published on Supply Chain Dive. To receive daily news and insights, subscribe to our free daily Supply Chain Dive newsletter. A federal court on Wednesday blocked many of President Donald Trump's sweeping tariff executive orders, saying the president overstepped his use of emergency powers to enact them. The United States Court of International Trade issued an injunction on four executive orders that called upon various national emergencies to enact tariffs on Canada, China and Mexico, and a 10% global tariff plus additional reciprocal tariffs. The injunction called for the government to stop any operations related to those tariff orders immediately, and to issue administrative notices on the permanent injunction within 10 days. Lawyers representing the Trump administration quickly appealed the decision to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., and have 14 days to file additional documents supporting their case. The injunction came as the result of several legal cases wherein a few small businesses and several U.S. states filed separate but similar petitions to halt the tariffs, arguing their imposition via the International Emergency Economic Powers Act overstepped presidential powers. The court eventually sided with the plaintiffs and ruled it was appropriate to block the executive orders that imposed the tariffs as a result. 'The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,' the court panel's opinion reads. 'The Trafficking Tariffs fail because they do not deal with the threats set forth in those orders.' Trump is not the first president to have used emergency powers to impose tariffs, per an April report by the Congressional Research Service, although his authority to do so was always in question. In 1971, President Richard Nixon imposed a global 10% tariff to address a national emergency related to the country's economic position. However, Trump's use of emergency powers is different in a few ways. First, the president has used emergency powers more broadly, claiming crises on immigration, fentanyl trafficking, and disproportionate trade relationships as distinct emergencies justifying new tariffs. Second, the report notes the law Nixon used was since reformed into the IEEPA — the law used by Trump — and that, therefore, the IEEPA's use for tariffs had so far been legally untested. "IEEPA authorizes the President to 'regulate' a variety of international economic transactions, including imports. Whether 'regulate' includes the power to impose a tariff, and the scale and scope of what tariffs might be authorized under the statute, are open questions as no President has previously used IEEPA to impose tariffs," Christopher A. Casey, analyst in International Trade and Finance for the Congressional Research Service, wrote in the report. The U.S. Court of International Trade was established by the Constitution and has nationwide jurisdiction over civil actions arising out of customs and trade laws in the country, according to the court's website. A federal appeals court can review its decisions. However, several Trump administration officials put out statements criticizing the courts' action to halt tariffs. White House Deputy Chief of Staff Stephen Miller, for example, said on X: 'The judicial coup is out of control.' And, in a statement provided to several media outlets, White House spokesperson Kush Desai said: 'It is not for unelected judges to decide how to properly address a national emergency." Editor's note: This is a developing story and will be updated. Recommended Reading Trump's tariffs: Tracking the status of international trade actions
CNBC
29-05-2025
- Business
- CNBC
Court strikes down Trump reciprocal tariffs
President Donald Trump exceeded his power when he enacted steep "reciprocal" tariffs on more than 180 countries and territories in April, a panel of federal trade judges ruled Wednesday. The judges wrote that the International Emergency Economic Powers Act, a 1977 law which Trump invoked to justify the tariffs, does not actually give the president the power to issue the sweeping duties initiated last month. "The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs. The Trafficking Tariffs fail because they do not deal with the threats set forth in those orders," the judges wrote. The suit was brought on behalf of five U.S. businesses that rely on imports to some extent. The judges said that Trump's tariff orders were "unlawful as to all," not just those plaintiffs' companies, so there would be "no question here of narrowly tailored relief." The judges ordered the challenged tariffs to be "vacated and their operation permanently enjoined." Lawyers for the White House could appeal the matter, but the case and decision put President Donald Trump's economic agenda under pressure. This is breaking news. Please refresh for updates.
