Federal Circuit Court of Appeals Invalidates IEEPA Tariffs

In the third federal court decision since May, the full panel of the U.S. Court of Appeals for the Federal Circuit on August 29, 2025 struck down President Trump’s IEEPA (International Emergency Economic Powers Act) tariffs as unlawful. However, the court stayed its decision until October 14 so the government could file a petition for writ of certiorari to allow the U.S. Supreme Court the opportunity to take the case for final resolution. (Another appeals court decision from the District of Columbia circuit is still pending.) 

In a 7-4 decision largely upholding the decision of the U.S. Court of International Trade (CIT), the appeals court stressed that IEEPA does not grant the president “unbounded” authority to impose tariffs of unlimited duration on goods imported from almost every U.S. trading partner in the world (for prior coverage, see the trade alert dated May 30, 2025). In addressing only the IEEPA “fentanyl” (or “trafficking”) tariffs and the IEEPA “reciprocal” tariffs, the court wrote that the statute “bestows significant authority on the president to undertake a number of actions in response to a declared national emergency, but none of these actions explicitly include the power to impose tariffs, duties, or the like, or the power to tax." The ruling noted that the plain language of the statute does not mention the words “tariff,” “duties,” or “tax.”

In contrast, the court highlighted many specific trade remedy and other statutes containing an express delegation by Congress to the president of its sole constitutional power to impose tariffs and taxes. The court ruled that IEEPA did not contain such a delegation and that absent such clear and precise language from Congress (including limits on the president’s power), these two IEEPA tariffs are unlawful.

The court also found that the president’s use of IEEPA to impose tariffs ran afoul of the “major questions” doctrine, which holds that major regulatory initiatives that are broad-based cannot rest on minor, vague, or obscure provisions of law without clear congressional authorization, noting first that the power to tax has long been held separate from the power to regulate. “The tariffs at issue in this case implicate the concerns animating the major questions doctrine as they are both 'unheralded' and 'transformative,'" it wrote. The court added that since IEEPA's enactment nearly 50 years ago, presidents have frequently invoked this statute but no president had ever previously used IEEPA to impose tariffs and/or adjust tariff rates.

Four judges in the majority went further and wrote that IEEPA does not allow the president to impose tariffs under any circumstances. Importantly, they wrote that the government’s position on the "scope of authority granted by IEEPA would render it an unconstitutional delegation," a recurring issue (“non-delegation doctrine”) before the current U.S. Supreme Court.

In an interesting twist, the majority also vacated the CIT’s nationwide permanent injunction against further collection of these duties and sent that portion of the decision back to the lower court to consider whether such an injunction was legal in light of new U.S. Supreme Court precedent on nationwide injunctions. It also ordered the CIT to consider whether relief should only be granted to the importers that filed the case instead of to all importers that paid the tariffs, and for the CIT to pause any action until the October 14 date staying its mandate.