Court of International Trade Strikes Down IEEPA Tariffs in V.O.S. Selections

Which tariffs were challenged

The court addressed two groups of measures. The "Trafficking Tariffs" were imposed on goods from Canada, Mexico and China in response to declared national emergencies over cartels, illicit drugs and border security, and currently stand at 25% for Mexican and Canadian products and 20% for Chinese products. The "Worldwide and Retaliatory Tariffs" stem from Executive Order 14257 of 2 April 2025, which imposed a 10% duty on imports from all trading partners and higher rates for 57 countries, later paused for most countries, and from subsequent orders adjusting the rate on Chinese goods.

What the court decided

The court held that the Constitution assigns Congress the exclusive power to lay duties and regulate foreign commerce, and that it does not read IEEPA to confer unbounded tariff authority on the President. The Worldwide and Retaliatory Tariff orders exceed any authority IEEPA grants to regulate importation by means of tariffs. The court pointed to Section 122 of the Trade Act of 1974, which addresses balance of payments problems with a 15% cap on tariffs and a maximum duration of 150 days, as showing that Congress has set specific limits for responding to trade deficits.

The Trafficking Tariffs failed for a different reason: IEEPA powers may be used only to deal with an unusual and extraordinary threat, and the court found that these tariffs do not deal with the threats identified in the orders. Because duties must be uniform throughout the United States, the court found no basis for relief limited to the plaintiffs.

What happens next

The ruling covers only tariffs imposed under IEEPA. Duties imposed under other statutes are not affected. The decision is subject to appeal to the US Court of Appeals for the Federal Circuit. Importers that have paid IEEPA duties should track the appeal and consider how to preserve any potential refund claims.

Sources

• US Court of International Trade: V.O.S. Selections, Inc. v. United States, Slip Op. 25-66 (28 May 2025)
• The White House: Executive Order 14257, Regulating Imports with a Reciprocal Tariff (2 April 2025)