Federal Circuit blocks majority of IEEPA tariffs pending appeal

Last week the U.S. Court of Appeals for the Federal Circuit, in a 7-4 decision, found that most tariffs imposed under the International Emergency Economic Powers Act (IEEPA) are unlawful. The court left the duties temporarily in force through October 14 to allow the administration time to seek review by the Supreme Court.

Earlier Court of International Trade decision and the tariffs affected

The appellate ruling echoes a May finding by a three-judge panel at the U.S. Court of International Trade (CIT) that former President Trump had exceeded IEEPA authority when he imposed broad tariffs in 2017–2024. The contested actions included a 10% global tariff, 25% duties on goods from Canada and Mexico, 30% levies tied to China addressing fentanyl and border concerns, and elimination of the de minimis exemption for imports from China. The CIT had ordered a permanent halt to most of those measures and barred future modifications, although the White House obtained a brief reprieve the following day.

Administration warns of wider economic risks

The White House told the courts, according to reporting in The New York Times, that weakening the administration’s tariff program could prompt serious economic disruption, with knock-on effects for trade agreements and U.S. relationships with other governments.

Supply chain leaders face strategic uncertainty

Supply chain and sourcing executives say the legal battle intensifies existing trade-driven uncertainty about where to invest, how much capital to commit, hiring plans and whether to restructure supply lines. With enforcement paused until October 14, many firms are weighing contingency options while awaiting the appeals process.

Industry expectations and budget implications

Observers told Logistics Management that if the tariffs are ultimately removed there could be measurable impacts on overall economic activity, inventory front-loading patterns and federal budget calculations, since tariff receipts have been folded into recent budget negotiations.

S&P Global analysis on import coverage and sector winners

S&P Global Market Intelligence reported earlier this summer that if the CIT decision stands it would strip tariff coverage from about half of U.S. imports. The report cautioned, however, that the administration retains other levers to raise import costs, leaving businesses with limited planning certainty.

The analysts highlighted consumer-facing categories that would gain most if IEEPA duties are invalidated and a high share of U.S. imports in those categories come from mainland China:

• Toys — 75.8% imported from mainland China in 2024
• Homewares — 75.1% imported from mainland China in 2024
• Audio-visual equipment — 37.0% imported from mainland China in 2024

Those sectors are highly seasonal and face sourcing uncertainty ahead of the peak shipping period from June through September. To date, companies have relied on tactical measures such as front-loading inventories, raising prices and negotiating costs, and they may continue similar approaches during the tariff uncertainty.

Constitutional questions over delegated tariff authority

Legal and trade practitioners say the dispute centers on whether IEEPA grants the President sweeping authority to impose global tariffs. Jonathan Todd, Vice Chair for Transportation & Logistics at Benesch, framed the issue as a constitutional one about which branch of government holds tariff power and whether Congress can delegate blanket authority to the executive. He noted the litigation involves importers, state governments, judges and the administration, and that the outcome will touch core separation-of-powers questions.

Experts forecast Supreme Court review and possible administrative workarounds

Greg Hussian, a partner at Foley & Lardner LLP, described the IEEPA-based tariffs as legally vulnerable and said the statute was originally designed to be temporary in response to earlier presidential tariff attempts. He predicts the Supreme Court has a strong chance of overturning the IEEPA approach, but he also expects the administration could attempt to reestablish duties using other trade authorities, such as a Section 301 investigation, creating messy questions about refunds for previously collected duties.

Trade groups call for congressional clarity

Jake Colvin, president of the National Foreign Trade Council, welcomed the appeals court’s confirmation of the lower court’s check on the administration’s use of IEEPA, but stressed that any practical relief for businesses remains uncertain while appeals continue. He said a final ruling against the IEEPA approach should prompt Congress to reassert its constitutional role over tariffs and provide longer-term certainty, though he warned the administration may rely on alternate authorities to maintain high duties.

Importers and forwarders managing short-term fallout

Mike Short, president of Global Forwarding at C.H. Robinson, said importers are in limbo with enforcement delayed until October 14 and a likely Supreme Court appeal on the horizon. He noted the contested measures cover reciprocal tariffs on goods from most countries as well as drug-related tariffs affecting Canada, Mexico and China, and account for a large portion of duty costs for many customers.

Short added that clients have been seeking guidance on the chances of Supreme Court review, whether the ruling will be upheld and how refunds might be processed. C.H. Robinson is assisting customers by mapping broader supply-chain options to offset potential costs and identify efficiencies to bolster long-term resilience during ongoing tariff uncertainty.