Yesterday the Court of International Trade (CIT) ruled the International Emergency Economic Powers Act (IEEPA) tariffs are unlawful. The decision blocks tariffs which the U.S. administration used to justify sweeping duties by declaring a national emergency. The duties include April reciprocal tariffs (most countries at 10% base with China at 125%). In early May, the U.S. and China agreed to a 90-day pause, reducing reciprocal tariffs on Chinese goods to 30%.

The ruling also blocks separate tariffs the U.S. administration imposed on China, Canada, and Mexico, which the administration justified as a reaction to fentanyl trafficking. The ruling doesn’t affect industry-specific tariffs on steel, aluminum, or automobiles issued under a different law.

The CIT issued a permanent injunction, requiring the administration to revise its orders within 10 days. The U.S. government filed an appeal and has requested a delay in enforcing the court’s ruling. A similar motion may be filed with a higher court, and the case could eventually reach the Supreme Court.

In the near term, tariff collection is expected to continue, but it remains unclear if or when refunds will be issued. We are awaiting further guidance from U.S. Customs & Border Protection (CBP) regarding how tariffs will be collected during this interim period, and we will continue to share updates as soon as information is confirmed.

These regulations are subject to change so please reach out to your Mallory Alexander representative or our M-PACT team for further assistance.