Well, I predicted there would probably be some significant breaking news late in the day today, it being the Friday of a holiday weekend, but this wasn't what I had in mind: In a stunning 7-4 decision the U.S. Court of Appeals for the Federal Circuit has issued a ruling affirming the Court of International Trade (CIT) decision which set aside five of President Trump's executive orders imposing tariffs.
The opinion is 127 pages long and includes a dissent from Judges Taranto, Prost, and Chen, and Chief Judge Moore. Given that, it will take a while to review and digest the ruling. However, here are the nuts and bolts of the case thus far:
In late May, a three-judge panel of the CIT granted summary judgment to plaintiffs, striking down a broad set of tariffs imposed by President Trump. The court found that the administration’s actions exceeded the statutory limits of the International Emergency Economic Powers Act (IEEPA), and, in doing so, violated the Constitution’s separation of powers.
No sooner had the ink dried on that order, however, than the administration appealed it to the Federal Circuit, which then issued a stay of the lower court ruling.
READ MORE: Federal Trade Court Strikes Down Trump’s 'Liberation Day' Tariffs, Citing Overreach
Not So Fast: Federal Circuit Halts Trade Court Ruling on Trump Tariffs
Oral argument was heard on consolidated cases at the end of July. Now the appellate court has issued its ruling, and it's one sure to send shockwaves through the world of international trade. In ruling that the tariffs exceed the Executive's authority, the court specified:
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.
However, the court reasoned:
Both the Trafficking Tariffs and the Reciprocal Tariffs are unbounded in scope, amount, and duration. These tariffs apply to nearly all articles imported into the United States (and, in the case of the Reciprocal Tariffs, apply to almost all countries), impose high rates which are ever-changing and exceed those set out in the HTSUS, and are not limited in duration. The Trafficking and Reciprocal Tariffs assert an expansive authority that is beyond the express limitations of Yoshida II’s holding and, thus, beyond the authority delegated to the President by IEEPA.
But the court also vacated the CIT's injunction of the Challenged Executive Orders, noting the Supreme Court's ruling in Trump v. CASA, Inc.:
On remand, the CIT should consider in the first instance whether its grant of a universal injunction comports with the standards outlined by the Supreme Court in CASA.
Ultimately, the court affirmed in part, vacated in part, and remanded in part the CIT ruling:
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.
As noted above, that's a lot to digest, and it will take a bit of study to do so. Nevertheless, this is a ruling that's sure to shake things up. For now, the court is withholding its mandate through October 14, in order to allow for an appeal to be filed. And there will, no doubt, be an appeal forthcoming.
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