CAFC Strikes Down Reciprocal, Fentanyl Tariffs, Sends Case Back to CIT to Rethink Injunction
The U.S. Court of Appeals for the Federal Circuit on Aug. 29 said the president doesn't have unlimited tariff authority under the International Emergency Economic Powers Act. Seven of the court's 11 total justices presiding over the case affirmed the Court of International Trade's conclusion that President Donald Trump's reciprocal tariffs and tariffs on China, Canada and Mexico meant to combat the flow of fentanyl exceed the president's authority under IEEPA.
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However, the court vacated the trade court's universal injunction against the challenged tariffs, sending the issue back to CIT in light of the Supreme Court's recent decision in Trump v. CASA, which pared back the use of universal injunctions.
Declining to decide whether IEEPA provides for tariffs at all, the court did note that Congress may have ratified a ruling from the Federal Circuit's predecessor court, which said the Trading With the Enemy Act, which contains identical language to IEEPA, can in some instances provide for tariffs. However, the court faulted the reciprocal and fentanyl tariffs for being "unbounded in scope, amount, and duration" and applying to "nearly all articles imported into the United States" at "ever-changing" rates that "exceed those set out" in the Harmonized Tariff Schedule.
Four of the judges dissented from the ruling.