A Brief Survey of the IEEPA Legal Challenges

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May 1, 2025
By: David G. Forgue and Chaney A. Finn

There is no doubt that those in international trade have front row seats to unprecedented times with the series of tariffs imposed on U.S. trading partners on the alleged basis of a national emergency declared by the President of the United States under the International Emergency Economic Powers Act (IEEPA). President Trump’s leverage of the IEEPA to advance the administration’s trade and foreign policy has sparked debate about the authority over international trade that Congress (perhaps) delegated to the Executive Branch to address threats to the U.S. economy, national security, or foreign policy.

As way of background, the U.S. Constitution designates Congress the power to regulate foreign commerce and impose tariffs. Although the Executive Branch has broad authority over laws that govern trade, such as free trade agreements administered by the U.S. Trade Representative (USTR), approval must be granted by Congress prior to those taking effect. However, the clash between the Executive and Legislative Branches over international trade implications is nothing new. We have noted objections from Congress to several “new era” deals with U.S. trading partners that bypassed the Legislative Branch during the Biden administration.

Historically, invocation of the IEEPA pertained to freezing or otherwise blocking assets of foreign governments deemed to be acting contrary to U.S. interests or terrorist organizations. However, it appears to grant broad authority to the President to act in situations deemed national emergencies. Multiple suits have recently been brought forth by states, small businesses, and tribal members, challenging whether this authority, when exercised to impose duties, violates the Constitution by bypassing Congress (separation of powers) in an overreach of authority with the use of IEEPA. Each suit also contains other factors for the court to consider, with some key points summarized below:

California led the states with the first challenge, arguing, in addition to over-expanding presidential reach, that the IEEPA does not specify that tariffs may be imposed. California alleged that the law provides only a limited toolkit for the president to respond to national emergencies, not to "rule by fiat" and impose economic measures that may significantly impact Californians.

In a separate action, Oregon, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, and Vermont have filed a joint suit of their own, claiming that the IEEPA trade emergencies are not “emergencies under the statute, since they are not "unusual and extraordinary threats." The states also argue that the implementation of the duties violated the Administrative Procedure Act.

In a third suit, a coalition of eleven small businesses filed a joint complaint to the CIT, specifically targeting President Trump's "reciprocal tariffs," requesting President Trump’s executive actions be nullified, and for the return any overpaid duties. A fourth suit, filed by a separate group of small businesses, requested the CIT to impose a temporary restraining order blocking Customs from collecting the duties from the subject tariffs on imports.

Notably, the U.S. Department of Justice has successfully requested that any case filed with a regional, circuit, or district court, be transferred to the U.S. Court of International Trade (CIT). In a (fifth) suit brought by members of the Blackfeet Nation, the court held that the CIT has exclusive jurisdiction to hear tariff disputes, and the change in venue is necessary to prevent conflicting rulings. The Blackfeet suit is interesting in that in asserts not only separation of powers issues but also rights to cross the Canadian border negotiated among the United States, the Blackfeet, and successive sovereigns in Canada.

Regardless of additional claims suits have for support, the main point for each suit challenges the constitutionality regarding the authority to impose tariffs under the IEEPA. Plaintiffs argue the power exercised by President Trump under the IEEPA is an overreach that undermines separation of powers. It is unclear how the CIT will rule at this time, but there appears to be no indication that the tariffs will be immediately blocked. In fact, it seems clear that the issues will ultimately be decided by the Supreme Court.

As tariffs are applied to imports from more countries companies will need to consider how best to protect themselves over time. In the event the IEEPA tariffs remain in place for a significant period of time the amounts at issue will become substantial and it is likely that only importers who have preserved their rights in court will have a chance to recoup tariffs previously paid. Should you have any questions regarding tariffs, or any other trade-related questions, do not hesitate to contact any attorney at Barnes, Richardson & Colburn LLP.