U.S. Court of Appeals for the Federal Circuit Rules Majority of President Trump’s Tariffs Illegal

In a split decision, 7 – 4, the Court of Appeals for the Federal Circuit (“CAFC”) affirmed the Court of International Trade’s (“CIT”) decision holding that President Trump’s IEEPA duties are contrary to law. This decision is limited to IEEPA Reciprocal Tariffs and IEEPA Fentanyl Tariffs (currently applicable on goods from China, Mexico and Canada) and does not invalidate the Section 232 tariffs on steel/aluminum/copper and derivatives and automotive products. While the CAFC held that IEEPA tariffs are contrary to law, it remanded for further consideration the CIT’s decision that the IEEPA tariffs should not be paid pending appeal. Thus, importers must continue to pay IEEPA tariffs as litigation continues. We predict that the Supreme Court will consider this matter in the not-too-distant future. Importers should continue to carefully monitor liquidations. There is no need for immediate action, but at some point, if entries liquidate, protests will need to be filed. Of note are entries that were recently liquidated outside of the normal liquidation cycle to assess IEEPA tariffs based upon CBP’s position that the so-called “in transit” exemption for the Reciprocal Tariffs did not apply to air freight or goods transferred from a “feeder vessel”.