Court Extends IEEPA Tariffs as Administration Appeals

A federal appeals court has extended a stay on a lower court ruling that blocked President Donald Trump’s controversial use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs, allowing the levies to remain in place pending further litigation.

The U.S. Court of Appeals for the Federal Circuit (CAFC) issued the order Tuesday night, stating that the legal challenges “present issues of exceptional importance warranting expedited en banc consideration of the merits.” Oral arguments are scheduled for July 31.

President Trump welcomed the decision in a social media post, writing: “A Federal Appeals Court has just ruled that the United States can use TARIFFS to protect itself against other countries,” and called the ruling a “great and important win for the US.”

The stay applies to two consolidated lawsuits—one brought by a coalition of small businesses and the other by a group of state governments—challenging Trump’s authority to impose so-called “reciprocal” and “universal” tariffs under IEEPA. The plaintiffs argue that IEEPA, enacted in 1977, does not authorize the President to impose tariffs as a response to national security threats posed by trade deficits. The U.S. Court of International Trade (CIT) had agreed, ruling on May 28 that the tariffs exceeded the authority delegated by Congress under the statute.

In a LinkedIn post following the CAFC ruling, national security attorney and host of The Security Economics podcast Peter Harrell noted that the appeals court “did not take a position on the underlying legal merits,” but signaled that “both sides have made substantial arguments.” He added that the Department of Justice appeared to persuade the court that maintaining the tariffs during ongoing trade negotiations was in the public interest.

The litigation targets tariffs imposed under IEEPA on all countries, as well as country-specific tariffs on China, Canada, and Mexico, which the administration justified as measures to counter fentanyl trafficking and trade imbalances. Tariffs imposed under Section 232 on steel, aluminum, and automobiles are not part of the lawsuits.

The Trump administration paused implementation of the reciprocal tariffs shortly after announcing them, citing a 90-day window for countries to negotiate tariff-reduction agreements. That pause is set to expire on July 9, after which the administration could resume enforcement unless blocked by further court action.

According to Harrell, if the CAFC adheres to its current schedule, a decision may be issued by late August. He anticipates that whichever party loses will likely seek review by the U.S. Supreme Court. Harrell, who has participated in amicus briefings in the case, projects that the courts are more likely than not to find the IEEPA tariffs unlawful. If struck down, importers may be eligible for tariff refunds.

Meanwhile, at least five related cases challenging the tariffs are pending in other courts, including the D.C. and Ninth Circuit Courts of Appeals. While the CAFC is expected to rule first, any delays could allow other circuits to weigh in.

President Trump remains the only U.S. president to impose tariffs under IEEPA. However, a precedent exists in President Richard Nixon’s use of the Trading with the Enemy Act—IEEPA’s predecessor—to impose a 10 percent import surcharge during the 1971 monetary crisis.

The outcome of the CAFC case will likely determine the extent of executive authority under IEEPA to reshape U.S. trade policy through emergency powers.