CIT Committed Host of Legal Errors in Striking Down IEEPA Tariffs, US Tells CAFC

The U.S. also faulted the trade court for failing to discuss any of the factors for equitable relief before enjoining enforcement of the tariffs, which the government said requires remand all by itself.

Last month, the trade court issued its decision, vacating the EOs implementing the reciprocal tariffs and tariffs on China, Canada and Mexico meant to combat the flow of fentanyl (see 2505280068). CIT didn't say IEEPA categorically doesn't provide for tariffs, though the court said IEEPA doesn't allow for tariffs to address balance-of-payments issues in light of the specific authority to address these issues under Section 122, and that the fentanyl tariffs don't "deal with" the declared emergency, since IEEPA can't be used to create leverage over another country to address a problem.

Appealing to the Federal Circuit, the U.S. said IEEPA's "text and history, as well as governing precedent, all confirm that the statute" lets the president impose tariffs to "address declared emergencies." The government's brief noted that CIT didn't call into question the ability of the president to impose tariffs under IEEPA generally, unlike the U.S. District Court for the District of Columbia, which categorically said the statute doesn't confer such power (see 2505290037).

Defending the reciprocal tariffs, the government addressed each of the trade court's rationales for its decision to vacate the "Liberation Day" tariffs, starting with CIT's ruling that "any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional." The government said this rationale "attacks a straw man," since no party suggested IEEPA "delegates unlimited tariff authority," given the procedural limits found inherent in IEEPA and the National Emergencies Act.

This nondelegation concern is only raised when, "after the application of ordinary textual analysis, the statute is found to be susceptible of more than one construction," the U.S. said. However, the trade court "failed to identify any 'plausible construction' of the statute," which allows the president to "regulate ... importation," under which some tariffs constitute regulations of importation and others do not, the brief said.

"Spotting a constitutional issue does not give a court the authority to rewrite a statute as it pleases," the government quipped.

The brief added that the trade court's nondelegation concern also only arises when a "serious doubt" is raised about the constitutionality of a congressional act, and, here, no such doubt exists, given that Congress necessarily delegates power broadly in "matters of foreign affairs."

The U.S. then said the trade court misapplied the major questions doctrine, which says that federal agencies must act upon explicit delegation from Congress when regulating areas of major political or economic significance. Not only does this doctrine not apply to the president, "the most democratic and politically accountable official in Government," it's only applied where the judiciary is skeptical that Congress meant to convey the power wielded by the agency, the U.S. said.

There's no "grounds for skepticism" here, since the president's power over trade under IEEPA isn't an "unheralded" invocation of a "narrow" statute but is rather the opposite, the brief said. "In other words, IEEPA is on its face all about giving the President major powers to address major concern," the government argued. "It would be perverse to apply the major-questions doctrine to curtail Congress’s conscious efforts to address the most major of questions."

And while the trade court more loosely pointed to separation of powers concerns raised by the IEEPA tariffs, the U.S. said these concerns are "difficult to understand." IEEPA expressly delegates to the president "broad statutory authority on top of authority that the President already possesses in the fields of foreign affairs and national security," the brief said.

Regarding CIT's rationale that Section 122 strips the president of the power to impose tariffs to address balance-of-payments issues under IEEPA, the U.S. said there's a strong presumption that two statutes passed by Congress exist harmoniously. Not only do the laws do just that, since they can be used at different times in response to different threat levels, the trade court failed to even acknowledge this presumption, the brief said.

The government claimed that IEEPA's emergency powers are "merely complementary" to the powers found in Section 122, which limit the president to imposing tariffs up to 15% for up to 150 days and are used to "address specific non-emergency harms." The U.S. added that the trade court also erred, since the reciprocal tariffs do much more than merely address balance-of-payments issues, noting that President Donald Trump imposed the tariffs to address other issues, including "a lack of reciprocity in our bilateral trade relationships."

Defending the fentanyl tariffs, the U.S. said the EOs "deal with" the declared emergencies in a number of ways, including by pressuring other nations to crack down on the issue and eliminating the de minimis threshold by which fentanyl may sneak into the country undetected. The trade court's ruling that IEEPA can't be used to create leverage in negotiations was "erroneous," since there's "no basis -- textual or otherwise -- for" the court's construction of the phrase "deal with" that excludes leverage, the brief said.

Under CIT's read of the law, "the blocking of Iranian assets during the Embassy hostage crisis -- an action taken under IEEPA itself," would have been illegal, since it merely created leverage to secure the hostages' release, the government argued.