The Court of Appeals for the Federal Circuit (7-4) has ruled that Donald Trump’s tariffs lacked statutory authority, affirming the findings of the lower court but vacating the lower court’s universal injunction and remanding for further consideration as to the scope of the injunction in light of the Supreme Court’s recent ruling as to universal injunctions.
(The Federal Circuit has jurisdiction over disputes involving international trade, among other things.) The ruling will not take effect until October 14 per the court order, to give time for the inevitable appeal to the Supreme Court.
The Court limited its ruling to the five sweeping tariffs imposed by Trump, and does not address subsequent additional tariffs since those were not part of the challenge.
From the Opinion:
The Government appeals a decision of the Court of International Trade setting aside five Executive Orders that imposed tariffs of unlimited duration on nearly all goods from nearly every country in the world, holding that the tariffs were not authorized by the International Emergency Economic Powers Act (IEEPA), 50 U.S.C. § 1701 et seq. Because we agree that IEEPA’s grant of presidential authority to “regulate” imports does not authorize the tariffs imposed by the Executive Orders, we affirm. ***We are not addressing whether the President’s actions should have been taken as a matter of policy. Nor are we deciding whether IEEPA authorizes any tariffs at all. Rather, the only issue we resolve on appeal is whether the Trafficking Tariffs and Reciprocal Tariffs imposed by the Challenged Executive Orders are authorized by IEEPA. We conclude they are not….Upon declaring an emergency under IEEPA, a President may, in relevant part, “investigate, block during the pendency of an investigation, regulate, direct and compel, nullify, void, prevent or prohibit” the “importation or exportation of . . . any property in which any foreign country or a national thereof has any interest.”. 50 U.S.C. § 1702(a)(1)(B). “Regulate” must be read in the context of these other verbs,14 none of which involve monetary actions or suggest the power to tax or impose tariffs.15 ….Since IEEPA was promulgated almost fifty years ago, past presidents have invoked IEEPA frequently. But not once before has a President asserted his authority under IEEPA to impose tariffs on imports or adjust the rates thereof. Rather, presidents have typically invoked IEEPA to restrict financial transactions with specific countries or entities that the President has determined pose an acute threat to the country’s interests….For the reasons discussed above, we discern no clear congressional authorization by IEEPA for tariffs of the magnitude of the Reciprocal Tariffs and Trafficking Tariffs….Given these considerations, we conclude Congress, in enacting IEEPA, did not give the President wide-ranging authority to impose tariffs of the nature of the Trafficking and Reciprocal Tariffs simply by the use of the term “regulate . . . importation.” ***We affirm the CIT’s holding that the Trafficking and Reciprocal Tariffs imposed by the Challenged Executive Orders exceed the authority delegated to the President by IEEPA’s text. We also affirm the CIT’s grant of declaratory relief that the orders are “invalid as contrary to law.” V.O.S. Selections, 772 F. Supp. 3d at 1383–84. We vacate the CIT’s grant of a permanent injunction universally enjoining the enforcement of the Trafficking and Reciprocal Tariffs and remand for the CIT to reevaluate the propriety of granting injunctive relief and the proper scope of such relief, after considering all four eBay factors and the Supreme Court’s holding in CASA.
Four Judges dissented (starting at page 62):
This court today affirms the holdings on jurisdiction, standing, and unlawfulness, while vacating the CIT’s injunction and remanding for reconsideration of the remedy. Maj. Op. at 24–25, 42–44. We agree with the majority’s decision on jurisdiction and standing and on the need for reconsideration of the remedy if the tariffs are unlawful. But we disagree with the majority’s conclusion on the issue of the tariffs’ legality. We conclude that plaintiffs have not justified summary judgment in their favor on either statutory or constitutional grounds. Regarding statutory authority: Plaintiffs have not shown on summary judgment that either group of tariffs fails to meet the preconditions IEEPA sets for the exercise of the presidential authorities that IEEPA grants—requiring that measures adopted be imposed to deal with an unusual and extraordinary threat, having foreign sources, to the national security or foreign policy or economy of the United States, the threat declared as a national emergency (lasting one year unless renewed). The majority does not disagree. Rather, the majority concludes that the particular tariffs at issue are not among the tools IEEPA makes available through the authorization to “regulate . . . importation” of goods, IEEPA § 203(a)(1)(B) [50 U.S.C. § 1702(a)(1)(B)], even when all the required preconditions are met. Maj. Op. at 37–38. We think otherwise. IEEPA’s language, as confirmed by its history, authorizes tariffs to regulate importation—a conclusion that the majority does not squarely reject, but Judge Cunningham and those who join her opinion do. And IEEPA’s language does not contain the additional limits on which the majority opinion today relies as the sole basis for its illegality holding. ***For the foregoing reasons, we respectfully dissent from the majority’s affirmance of the CIT’s summary judgment that the reciprocal and trafficking tariffs are unlawful.
The Court withheld the issuance of a Mandate, which would send the case back down to the lower court to carry out the ruling, until October 14, to give the government time to apply for relief in SCOTUS.
MORE TO FOLLOW
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