Sandler, Travis & Rosenberg, P.A. (ST&R) has provided this overview of the following actions that have taken place since the May 28 Court of International Trade (CIT) opinion validating the IEEPA tariffs.
- CIT rendered its decision that the IEEPA tariffs were unlawful.
- CIT issued an order that the IEEPA tariffs and executive orders and amendments were to be declared invalid and that they be revoked and that the government has 10 calendar days (until June 7) to effectuate the order.
- The Government filed an appeal to the Court of Appeals in the Federal Circuit (CAFC).
- The Government filed a motion at the CAFC to stay the CIT order for at least 7 days to allow the CAFC and, if necessary, the Supreme court to consider their longer-term request.
- The CAFC granted the Government’s request to stay the CIT order (hold off on revoking the Executive Orders) until they have time to consider their request for the longer term.
- The District Court issued its decision that the IEEPA is not a law providing for tariffs and therefore the CIT does not have jurisdiction, and granted the preliminary injunction requested for the two plaintiffs only (not all importers).
- The District Court held off on issuing its order for 14 days, allowing the Government to file an appeal.
So, what do all the above mean to importers and their customs brokers?
Tariffs: For the time being, tariffs will remain in place. The appeals court ordered that no action be taken until they have had time to consider the request to stay the order for the long term. So, it is a temporary stay, pending further consideration for a long-term suspension once the parties have both offered their position to the court. Meanwhile, you pay tariffs.
Jurisdiction: Right now, we have two courts that have decided they have jurisdiction to decide the cases. We must wait to see whether the CIT ultimately has jurisdiction and we follow its orders, or if the District Court has jurisdiction and we follow its orders.
Refunds: It is possible that at the end of the day, importers will be eligible for refunds equivalent to the duties paid variously for the IEEPA Fentanyl, the IEEPA Fentanyl and Border and the IEEPA Reciprocal tariffs retroactive to the first day of application (either Feb. 4 or April 5). However, until all the court issues are straightened out, you cannot correct your entries using a post summary correction – PSC – or file entries without the IEEPA tariffs – and it may not get sorted out until after the entries liquidate – at which time you will need to file protests to protect those entries and keep them open for when the courts have settled the issue.
Action: Importers should track all entries for which any IEEPA tariffs were paid including the expected liquidation date and the last day to file a protest (180 days from liquidation). As the case progresses, we will then know for which entries to either file a PSC, if the shipment is not liquidated, or to file a protest if it is liquidated. This data will also provide you with an expectation of potential refunds. Note that EVERYONE will be seeking refunds if the Executive Orders are eventually cancelled, so set expectations for how timely any eventual refunds with interest will be paid to you. It would not be unreasonable to expect refunds, if any, to not come until later in 2026 or even in 2027.
As you can clearly see, the tariff issue is very dynamic and constantly changing, but rest assured we are here for you to answer your questions.
IEEPA Tariff Background
President Trump on Saturday, Feb. 1, issued Executive Orders, under the authority of the International Emergency Economic Powers Act (IEEPA), to impose at midnight starting Feb. 4, 25% tariffs on imports from Canada (except energy products tariffed at 10%) and Mexico, and an additional 10% on imports from China. President Trump delayed the imposition of those tariffs, except for China, to March 4, after discussions with the leaders of Mexico and Canada. By Friday, Feb. 7, the President issued an amendment to his original executive order that allows Chinese goods to use de minimis until such time as the Department of Commerce notifies the President that “adequate systems are in place to fully and expediently process and collect tariff revenue applicable.”
On Feb. 10, President Trump announced 25% tariffs on certain steel and aluminum imports entering the U.S. Those tariffs took effect on March 12. The 25% duty rate applies to previously covered steel and aluminum products and derivatives including those produced in the previously excluded countries and on the new derivatives listed in the recently published steel and aluminum Annexes.
This tariff announcement was followed on Feb. 13 by President Trump’s announcement that the White House will commence a comprehensive investigation to determine “the equivalent of a reciprocal tariff with respect to each foreign trading partner” on other countries with existing tariffs on U.S. goods. The Office of the U.S. Trade Representative (USTR) on Feb. 20 announced that it seeks comments from the public regarding reciprocal tariffs, which are due by March 11.
On March 6, the President amended his IEEPA tariffs of 25% on Mexico and Canada. The effective date is 12:01 a.m. ET, March 7. Any Mexican or Canadian origin goods that qualify for free entry under the USMCA will not be subject to the additional 25% duties. In addition, potash from either country that does not qualify for duty free treatment under the USMCA will be subject to a 10% duty (in lieu of the 25% duty).
The White House Executive Order issued April 2 stated that all articles imported into the U.S. will be subject to an additional ad valorem rate of duty of 10 percent. The rates of duty shall apply with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. ET on April 5, except that goods loaded onto a vessel at the port of loading and in transit on the final mode of transit before 12:01 a.m. ET on April 5 and entered for consumption or withdrawn from warehouse for consumption after 12:01 a.m. ET on April 5 shall not be subject to such additional duty. President Trump on April 2 also signed an Executive Order to eliminate duty-free de minimis treatment for low-value imports from China, effective May 2 at 12:01 a.m. ET. On April 9, however, President Trump issued a 90-day pause on the reciprocal tariffs and lowered them to 10%.
President Trump on April 29 issued an Executive Order that most notably relieves automakers whose cars and light trucks are assembled in the U.S. from potentially facing stacked tariffs for auto part imports. The auto parts import tariffs were scheduled to take effect at 12:01 a.m. ET on May 3.
The U.S. and Chinese governments after meeting in Geneva, Switzerland, over the weekend of May 10-11 on Monday, May 12, announced a joint plan to begin deescalating tariffs, starting May 14. The statement said that both governments will be “moving forward in the spirit of mutual opening, continued communication, cooperation, and mutual respect,” following the imposition of significant tariffs on each other’s products.
