Yesterday (May 28), the U.S. Court of International Trade (CIT) ruled that Congress did not authorize the President with unbounded authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA) and halted the certain tariffs enacted by the Trump Administration under the law. The Court found that the Trump Administration does not have authority to enact unrestricted tariffs when it enacted duties on a global basis. The Court also rejected the tariffs in response to migration and drug smuggling concerns because the tariffs do not "deal with the threats set forth in those orders."

The ruling blocks the following tariffs enacted under IEEPA:

• Tariffs included in the April 2 "Liberation Day" announcement, including the 10% global rate and the higher per-country tariff rates currently subject to a 90-day pause
• Tariffs on Mexico, Canada, and China in response to migration and drug smuggling

For background purposes, EY Tax Alerts on these tariffs as originally proposed are available:

• Tax Alert 2025-0815
• Tax Alert 2025-0391

Tariffs not impacted by the decision include all tariffs in place prior to Inauguration Day, and sectoral tariffs imposed under Sec. 232 on steel, aluminum, and autos. Pending sectoral trade investigations are not impacted.

The ruling gives the Administration 10 days to effectuate the order and halt tariff collection. In response to the decision, the Trump Administration immediately filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit. While the timeframe for the appeal is unclear, the process may be expedited given the prominence of the case.

In the near term, the Administration may consider moving forward with tariffs under other authorities, including:

• Section 232 of the Trade Act of 1962 - Allows the President to adjust import duties if Department of Commerce finds certain products threaten to impair US national security
• Section 301 of the Trade Act of 1974 - Allows the president to impose tariffs if the US Trade Representative finds a trading partner is engaging in practices that burden or restrict US commerce
• Section 122 of the Trade Act of 1974 - Allows the president to enact tariffs up to 15% for up to 150 days in response to trade imbalances
• Section 338 of the Tariff Act of 1930 - Allows the president to increase tariffs up to 50% or block imports if a trading partner is discriminating against US goods or commerce

The Court ruling is available here.