Importer Opens Suit Against China IEEPA Tariffs in US District Court in Florida

The lawsuit marks the first major legal challenge to Trump's rampant trade agenda. Specifically, the complaint contests the IEEPA tariffs on China, which were imposed after a finding that the flow of fentanyl into the U.S. constituted a "national emergency" requiring the imposition of tariffs. Trump imposed an initial 10% tariff on China then doubled it to 20% a month later. Simplified said the tariffs will "greatly damage" the company, since it "imports material from China each year," and it will also suffer from added costs if it has to move manufacturing out of China.

The New Civil Liberties Alliance said in a press release that Simplified sells premium planners and "other home management products" and relies on Chinese imports to do business. The alliance is joined by Florida-based appellate lawyer Bryan Gowdy of Creed & Gowdy in litigating the case.

The complaint alleged that the president doesn't have the power to impose tariffs under IEEPA. It also said the tariffs on China are not "necessary" to address the declared emergency of "illegal opioids" and that the "statute violates the nondelegation doctrine."

Simplified's first claim is that proper statutory interpretation leads to the conclusion that IEEPA can't be used to impose tariffs. The importer cited the Supreme Court's recent decision in Loper Bright Enterprises v. Raimondo, which eliminated the concept of deferring to federal agencies' interpretations of vague statutes, to claim that the court must determine the "best reading" of IEEPA when interpreting the statute to find whether it authorizes tariffs.

The company said the Supreme Court "has warned against finding new authority in decades-old statutes," noting that no president has ever used IEEPA to set tariffs in its 48-year history. However, President Richard Nixon used the Trading With the Enemy Act, IEEPA's predecessor, to impose a 10% duty surcharge. Nevertheless, Simplified said that the lack of use of IEEPA as a source of tariff-making authority is in line with its text, since "the text does not authorize a president to require Americans to pay tariffs."

Simplified said tariffs "differ in kind from the actions the IEEPA does authorize," characterizing the permissible action under IEEPA as sanctions and export controls. In addition, the company contrasted IEEPA with other tariff-setting authorities like sections 201, 232 and 301, that explicitly refer to duties or tariffs.

The importer added that the "major questions doctrine" reinforces the conclusion that IEEPA can't be used to set tariffs. The major questions doctrine "presumes that Congress 'speak[s] clearly' if it authorizes the Executive Branch to" make decisions on issues of major economic and political importance, Simplified said. "It is just such a decision when a president imposes heavy across-the-board tariffs on all imports from our country’s three largest trading partners," the complaint argued, also noting the IEEPA tariffs on Canada and Mexico.

Simplified's second claim is that Trump has failed to show that the tariffs on China are "necessary" to address the stated emergency, as required by IEEPA. The complaint said there's no necessary connection between "the across-the-board tariff and the opioid problem, because the opioid problem is not a trade problem at all (given that what is being imported is in many cases an illegal substance), much less a trade 'emergency.'"

The importer added that Trump's statements also belie the claim that the tariffs are meant to address the flow of fentanyl into the U.S. Through various statements and social media posts, Trump has openly discussed imposing the tariffs "to lower the United States trade deficit and raise revenue," the brief said. "Those statements allow the Court to determine whether the stated reason for the President’s action is the actual reason," Simplified argued, invoking Supreme Court precedent.

The IEEPA tariffs also run afoul of the Constitution's nondelegation doctrine, which stipulates that Congress can only delegate power to another branch if it has "supplied an intelligible principle to guide" the use of discretion, Simplified argued. Should the court find that IEEPA does let the president impose the tariffs at issue, the statute lacks an "intelligible principle" that reins in "Executive Branch decision-making authority," the complaint said.

Lastly, Simplified argued that the modifications to the HTS required by the tariffs violate the APA. "The Department of Homeland Security, acting primarily through U.S. Customs and Border Protection, made these modifications to comply with the China Executive Orders," the complaint noted.

Notably, Simplified filed its suit in the Florida federal district court and not the Court of International Trade, likely raising jurisdictional questions about whether the suit is in the right court.

The suit was filed in the Northern District of Florida's Pensacola division, where it could be assigned to one of three judges: Lacey Collier, who was appointed by President George H.W. Bush; Margaret Rodgers, who was appointed by President George W. Bush; or Judge Kent Wetherell II, who was appointed by President Donald Trump during his first term.