Introduction
On August 29, a federal appeals court ruled that the International Emergency Economic Powers Act (IEEPA) does not provide the Trump Administration authority to impose retaliatory tariffs. In its ruling, the appeals court held that President Trump exceeded the authority granted by the IEEPA when he signed five Executive Orders imposing tariffs on “nearly all goods from nearly every country in the world.” The court’s ruling permitted the Trump Administration to appeal the judgment to the United States Supreme Court, which agreed to hear arguments during the first week of November. Trump is the first and only President to rely on the IEEPA to implement tariffs, so this case will cover new ground. With the challenged tariffs playing a large role in international trade, the outcome of this case will certainly impact U.S. agricultural markets. This article will discuss the background of the case, the decision of the appeals court, and what comes next.
Background
The IEEPA was established in 1977 to grant the President the authority to exercise a variety of economic powers in response to a declared national emergency, while also limiting other economic powers granted to the President by earlier statutes like the Trading with the Enemy Act (TWEA). Functionally, the IEEPA allows the President to “investigate, regulate, or prohibit any transactions in foreign exchange.” 50 U.S.C. §1702(a) (1977). However, the President’s authority under the IEEPA is available only “to deal with any unusual and extraordinary threat . . . if the President declares a national emergency with respect to such threat.” 50 U.S.C. §1701(a) (1977).
In January of this year, President Trump declared a national emergency at the U.S.- Mexico Border, citing national security concerns. This national emergency was later expanded to include Canada and China. Executive Orders Nos. 14193, 14194, 14195, 14257, and 14266 imposed tariffs on Mexico, Canada, and China in response to these national emergencies. The tariffs instituted by these executive orders are referred to in the court’s opinion as the “Trafficking and Reciprocal Tariffs.” The Trump Administration cited the President’s IEEPA authority to regulate foreign trade in the event of a national emergency as the legal basis for instituting the tariffs. At issue in V.O.S. Selections, Inc. v. Trump, No. 2025-1812 (Fed. Cir. 2025), are the five Executive Orders issued by President Trump to impose trade duties on foreign trading partners.
The Case
On April 14, 2025, a group of five businesses filed suit in the Court of International Trade (CIT), challenging the reciprocal tariffs instituted by President Trump following the declared national emergency. In the complaint, the plaintiffs alleged that the IEEPA did not grant President Trump the authority to levy the challenged tariffs. The complaint asserted that the authority to impose tariffs, “must be granted clearly and unmistakably” and not “through some implication so vague and indeterminate that it went unnoticed by every other President for nearly five decades.”
The plaintiffs additionally claimed that even if the IEEPA did confer this authority to the President, then it is an unconstitutional delegation of legislative authority. On this point, the plaintiffs alleged that interpreting the IEEPA as allowing the challenged tariffs would constitute a “sweeping delegation of legislative power.” According to the complaint, this “sweeping delegation” would violate the nondelegation doctrine, which exists to prevent Congress from giving its legislative power to entities not vested with such authority under the Constitution. At the CIT, the court held that the IEEPA did not authorize these tariffs and that the challenged orders would be permanently enjoined. Because the CIT found that the IEEPA did not authorize the tariffs, the CIT did not address whether it was an unconstitutional delegation of authority. The government appealed that decision to the U.S. Court of Appeals for the Federal Circuit.
On appeal, the court limited its discussion to “whether the Trafficking and Reciprocal Tariffs imposed by the Challenged Executive Orders are authorized by IEEPA.” The court held that they were not. In reaching this conclusion, the appeals court relied on the text of the IEEPA, the IEEPA’s history, and similar trade statutes. The court held that the IEEPA’s authority, which permits the President to “regulate . . . importation,” does not include the ability to impose sweeping tariffs. The court noted that the IEEPA does not include the word “tariff” or any of its synonyms like “tax” or “duty.” However, in a variety of other statutes that do confer tariff authority on the President, Congress has used “clear and precise terms to delegate tariff power.”
The court reasoned that the history and purpose of the IEEPA conflicted with President Trump’s tariffs. The court pointed out that since the IEEPA was enacted, “not once before has a President asserted his authority . . . to impose tariffs.” The court noted that the IEEPA was specifically enacted to “cabin the President’s authority” and further reasoned that, “it seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the President unlimited authority to impose tariffs.” This, coupled with the explicit grants of authority found in similar statutes, led the court to conclude that, “whenever Congress intends to delegate to the President the authority to impose tariffs, it does so explicitly.” Because the court found that IEEPA did not authorize these tariffs, the court did not address whether IEEPA violated the nondelegation doctrine.
Moving Forward
Despite finding that the IEEPA did not authorize the tariffs implemented by President Trump, the appeals court declined to affirm the CIT’s decision to overturn and block the challenged tariffs. For now, the challenged tariffs will stand. In reaching this decision, the court relied on Trump v. CASA, Inc., 606 U.S. 831 (2025). There, the Supreme Court held that the injunctions sought were “broader than necessary to provide complete relief to each plaintiff with standing to sue.” Rather than granting the injunction, the Supreme Court in CASA instructed the lower courts to “move expeditiously to ensure that, with respect to each plaintiff, the injunctions comport with this rule and otherwise comply with principles of equity.”
The appeals court here took the same approach. On sending the decision back to the CIT for further review, the appeals court instructed the CIT to “consider in the first instance whether its grant of a universal injunction comports with the standards outlined by the Supreme Court in CASA.” This refusal to grant the injunctions have preserved the tariffs and will allow the Trump Administration to continue collecting tariff revenue for the time being. The government has appealed the CIT’s decision to the Supreme Court, which decided to hear the case.
At the Supreme Court, two questions have been presented for review. First, whether the IEEPA allows a President to institute tariffs after declaring a national emergency. Second, if IEEPA authorizes the tariffs, whether the statute unconstitutionally delegates legislative authority to the President, a question that was left unanswered in the lower courts. The Trump Administration has urged the Supreme Court to hear the case and issue a decision quickly. In a document published on September 9, the Supreme Court granted a motion to expedite the case and set oral arguments for November 5, 2025.
The Supreme Court’s decision will have major political and economic implications, regardless of the outcome. Siding with the President would likely allow further tariffs to be enacted under the IEEPA and would expand the statute’s authority for future administrations. Siding with the plaintiffs would likely result in the challenged tariffs being completely vacated. Given the impacts of the tariffs so far, this option would have a major effect on the U.S. economy. A final decision is not likely to come soon, but the outcome of this case will have major implications for the U.S. agriculture industry.
To learn more about international trade, click here to view the NALC International Trade Reading Room
To read the International Emergency Economic Powers Act, click here
To read the court’s opinion, click here
To read the Court of International Trade’s opinion, click here
To read President Trump’s declaration of a national emergency, click here