On May 28, 2025, the U.S. Court of International Trade (USCIT) issued a decision vacating and permanently enjoining many of the most economically significant tariff orders issued over the past four months by President Trump. However, on May 29, 2025, the U.S. Court of Appeals for the Federal Circuit granted an administrative stay that temporarily leaves the tariffs in place until the Federal Circuit decides whether to grant a longer-term stay of the USCIT’s injunctions pending the Government’s appeal of the USCIT’s decision.

The USCIT’s Decision

The USCIT decision declares contrary to law and permanently enjoins:

• The tariffs imposed on Canadian, Mexican, and Chinese goods in February and March in connection with fentanyl trafficking; and
• The worldwide tariffs imposed by President Trump’s April 2, 2025, executive order, and subsequent adjustments and suspensions, including retaliatory tariffs imposed on Chinese goods after China responded to the April 2, 2025, executive order.

The tariffs at issue were imposed by President Trump under the International Emergency Economic Powers Act (IEEPA). Prior to the current administration, no President had ever used this statute to impose tariffs. The USCIT held that the worldwide and retaliatory tariff orders exceeded any authority granted to the President by the IEEPA to regulate importation by means of tariffs and that the trafficking-related tariffs were legally unsound because they do not "deal with" the threats set forth in the executive orders imposing them.

The Stay Issued By the Federal Circuit

The Government appealed the USCIT’s decision to the U.S. Court of Appeals for the Federal Circuit. In addition, the Government asked both the USCIT and the Federal Circuit to stay the USCIT’s injunctions pending the Government’s appeal.

On May 29, the U.S. Court of Appeals for the Federal Circuit granted an administrative stay of the USCIT’s judgments and permanent injunctions. Pursuant to this stay, the tariffs will temporarily remain in effect while the Federal Circuit considers the Government’s request to keep the injunctions issued by the USCIT stayed pending the Federal Circuit’s consideration of the Government’s appeal. The Federal Circuit ordered the plaintiffs-appellees to respond to the motion for a stay pending appeal by June 5 and directed the Government to reply by June 9. Accordingly, the Government will be able to continue collecting the tariffs at least until June 9.

Non-IEEPA Tariffs Are Not Affected

The USCIT’s decision does not affect tariffs imposed under statutes other than the IEEPA. Accordingly, tariffs on steel, aluminum, and automobiles imposed under Section 232 of the Trade Expansion Act of 1962 are unaffected. Likewise, tariffs imposed on Chinese goods under Section 301 of the Trade Act of 1974 are unaffected by the May 28 decision. Because the USCIT’s decision affects only tariff orders based on the IEEPA, in the event the Federal Circuit later permits the USCIT’s injunctions to take effect, it is possible that the administration will attempt to use alternate statutes to replace, at least in part, tariffs enjoined by the USCIT.

The U.S. District Court for the District of Columbia’s Separate Decision on IEEPA Tariffs

On May 29, 2025, the U.S. District Court for the District of Columbia (DDC) issued a decision finding unlawful many of the same tariffs that were enjoined the previous day by the USCIT. The DDC preliminarily enjoined application of the challenged tariffs to the plaintiffs in the case before it, but did not enjoin application of the tariffs more broadly.

The DDC held that the IEEPA does not provide the President with the power to impose tariffs. The DDC’s decision technically applies only to tariffs imposed on Chinese goods in February and March in connection with fentanyl trafficking and to the worldwide tariffs imposed by President Trump’s April 2, 2025, executive order and the subsequent April 8 and April 9 adjustments. However, the reasoning of the DDC’s decision would apply broadly to all IEEPA tariff actions. 

What’s Ahead

The President’s use of the IEEPA to impose tariffs continues to generate significant uncertainty about the tariff environment that will prevail in the weeks and months ahead. Cozen O’Connor attorneys be monitoring developments closely and are available to consult with you on implications for your business and strategies for navigating this uncertain tariff environment.