In a major reversal to the Trump tariff regime, today a three-judge panel of the U.S. Court of International Trade (CIT) vacated the global reciprocal tariffs and the special or fentanyl tariffs on Canada, Mexico, and China. Trump issued each of these tariff structures pursuant to the International Emergency Economic Powers Act (IEEPA).

The CIT ruled that (a) the reciprocal tariffs “exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs” and (b) the special or fentanyl tariffs on Canada, Mexico, and China “fail because they do not deal with the threats set forth in those orders.”

The CIT permanently enjoined operation of these tariffs, and within 10 days the CIT will be issuing Administrative Orders that set out how the permanent injunction will be implemented. The Administrative Orders may also address whether and how importers can obtain refunds of tariffs already paid.

The Trump Administration has already filed an appeal of the CIT’s decision to the U.S. Court of Appeals for the Federal Circuit (CAFC). The case may eventually reach the U.S. Supreme Court.

The CIT’s decision does NOT affect the application of the Section 232 tariffs on steel; aluminum; and automobiles and automotive parts; or the pending Section 232 investigations of medium- and heavy-duty trucks; copper; processed critical minerals and derivatives; timber, lumber, and derivative products; semiconductors; and pharmaceutical products. The courts have previously upheld the legality of Section 232 tariffs.

In addition, the CIT’s decision does NOT affect the enforcement of the Section 301 tariffs on imports from China, although aspects of the Section 301 tariff regime are still being considered by the courts.

This order, if upheld, will have major impacts and we will be posting updates as new information becomes available.