On May 28, 2025, the U.S. Court of International Trade declared key tariffs implemented by the Trump administration under the International Emergency Economic Powers Act (IEEPA) unconstitutional. The ruling directly impacts two high-profile tariff categories, the “trafficking tariffs,” which include measures against Canada, Mexico and China, and the broader “worldwide and retaliatory tariffs,” aimed at addressing global trade imbalances.
Pursuant to this ruling, a permanent injunction is currently in place, and the administration has been ordered to rescind the tariffs within 10 days.
Key Takeaways
The court ruled that President Donald Trump exceeded the limits of the IEEPA. As a result, the tariffs are currently enjoined and unenforceable.
The court emphasized that the IEEPA does not provide “unbounded authority” to impose tariffs. According to the court, an interpretation of the president’s “emergency powers” taken to the limits exercised by the administration in promulgating its IEEPA-based tariffs would constitute an unconstitutional delegation of Congress’ legislative powers. The first basis for this ruling was the nondelegation doctrine, which limits Congress’ ability to cede its core responsibilities to the executive branch. The second basis was the major questions doctrine, which requires clear congressional authorization for novel executive actions of vast economic and political significance.
The court sharply criticized the president’s use of emergency declarations as justification for broad trade policy actions, stating that “the mere incantation of a national emergency” cannot override constitutional checks and balances.” The court found that the trafficking tariffs do not truly connect to the emergency to which they are tied — even if they serve valid foreign policy purposes. The court also concluded that worldwide and retaliatory tariffs respond to an imbalance of trade, a circumstance that more properly falls under different statutory authorities that are narrower and non-emergent, and thus are ultra vires.
Next Steps
The Trump administration has appealed the ruling to the U.S. Court of Appeals for the Federal Circuit, asserting that trade imbalances constitute a legitimate national emergency. Given the breadth of the ruling and its reliance on foundational constitutional doctrines, the case will likely reach the U.S. Supreme Court. Although this decision does not directly affect six other pending tariff challenges by states and interest groups, its reasoning could influence those cases.
Further response from the Trump administration and U.S. Customs and Border Protection (CBP) is likely in the coming days.
The status of duties already paid under the IEEPA-based tariffs is unclear. Given the nature of the ruling — issuing the injunction on the basis of unconstitutionality — it is reasonable to assume that if it stands on appeal under the same or comparable reasoning, duties paid will be refundable. However, until the appeals are complete, that will remain uncertain. The administration may also seek a stay of the injunction that could allow CBP to continue collecting duties while the appeals process plays out.
The impact on the signed trade agreements that happened because of IEEPA (e.g., the U.S. and U.K. trade negotiations) is unresolved. It is uncertain how negotiated deals could change following the ruling, with the trade agreements yet to be implemented.
McGuireWoods and McGuireWoods Consulting continue to monitor developments closely, including the Federal Circuit appeal, and are available to assist clients with assessing the impact of these changes on their operations and current tariff liabilities, revising import/export strategies in light of the injunction, and ensuring compliance with the evolving trade framework.