5 minute read | September.12.2025
A federal appeals court ruled on August 29, 2025, that most of the Trump Administration’s sweeping tariffs on imports from U.S. trading partners, including reciprocal tariffs and anti-narcotics tariffs, are unlawful.
The Supreme Court has agreed to hear the case and will hold arguments in the first week of November. A decision is expected to follow quickly after.
The Federal Circuit reviewed a decision by the Court of International Trade that the Trump Administration’s tariffs imposed under the President’s powers under IEEPA exceeded the administration’s authority.
In agreeing with that conclusion, the Federal Circuit reasoned in part that, because other statutes give the President specific authority to impose tariffs, Congress gives the President such power only in clear, unequivocal terms. IEEPA—a nearly 50-year-old statute that provides the President broad power to deal with foreign threats to the U.S. national security, foreign policy or economy if the President declares a national emergency related to the threat—does not provide such clear, unequivocal authorization. The Federal Circuit also held that the government’s interpretation of IEEPA violates the major questions doctrine, a doctrine of statutory interpretation that can effectively prohibit executive branch agencies from enacting policies with vast economic significance without express congressional authorization.
The Federal Circuit stayed the effect of its ruling through October 14, 2025, to give the government time to seek review in the Supreme Court. Because the Supreme Court has agreed to hear the case, the tariffs will remain in effect until the Supreme Court ultimately rules.
Companies thus have continuing obligations to pay the import duties and comply with all other aspects of the tariff program.
The August 29, 2025, Federal Circuit decision and prospective Supreme Court decision relate only to IEEPA-based tariffs that the White House has imposed since February 2025. This and prior administrations have established a web of product-specific tariffs that are outside the scope of this litigation. These include, among others, antidumping and countervailing duties, tariffs under Section 301 of the Trade Act of 1974 to address alleged unfair trade practices, and tariffs imposed under Section 232 of the Trade Expansion Act of 1962 for national security reasons. Other court proceedings would be needed to eliminate or change those other tariffs.
Importers who have paid IEEPA-based tariffs should assess how best to position themselves for possible refunds if the Supreme Court invalidates these tariffs. The law on tariff reimbursement is murky. But there is precedent suggesting that importers other than the parties that brought the successful court challenges would need to file their own judicial challenges to be eligible for tariff reimbursement.
Seeking reimbursement may require companies to take steps now, even before the Supreme Court rules, including potentially:
The U.S. government has enhanced its focus on trade-related fraud and enforcement activity related to underpayment and nonpayment of tariffs. For example, two weeks ago, the government announced the launch of a Department of Justice–Department of Homeland Security task force on trade fraud.
We’ve previously highlighted recent enforcement actions by the Department of Justice under the False Claims Act, a civil law that allows the government to recover three times its damages plus penalties and attorneys’ fees for false claims that defraud government programs.
As the Trump Administration continues to prioritize tariffs and these tariffs increasingly contribute to the federal fisc, customs compliance risk will remain substantial.