Overview
This article is current at the time of posting.
On August 29, 2025, the United States Court of Appeals for the Federal Circuit (Federal Circuit or CAFC) issued a significant decision in V.O.S. Selections, Inc. v. Trump, upholding the Court of International Trade's (CIT) ruling that President Donald Trump's recent "emergency" tariffs exceeded his statutory authority under the International Emergency Economic Powers Act (IEEPA).1Background on the tariffs and legal challenges can be found in our previous blog post.
This client alert provides background on the Federal Circuit's opinion and analyzes its implications for businesses.
Overview of the Federal Circuit's Decision
In a 7-4 decision, the CAFC upheld the CIT's decision that certain tariffs imposed by President Trump pursuant to IEEPA were contrary to law. This decision related to two sets of IEEPA tariffs.
The first tariffs at issue (the Trafficking Tariffs) imposed duties on all imports from Canada, Mexico, and China based on alleged US national security risks associated with an influx of illegal aliens and illicit opioids. The second tariffs at issue (the Reciprocal Tariffs) were imposed under national emergency stemming from the trade deficit.
As previously covered, the CIT found that both sets of tariffs were illegal. The CIT held that the Reciprocal Tariffs were unlawful because IEEPA did not authorize tariffs as a response to "balance-of-payment deficits." The CIT held that the Trafficking Tariffs were unlawful because they were not narrowly tailored to "deal with" the national emergency that had been declared. The CIT therefore vacated both sets of tariffs and ordered them permanently enjoined.
In upholding the CIT's determination, the CAFC reviewed the statutory text and history of IEEPA and found there was no clear congressional authorization in the statute for tariffs "of the magnitude of the Reciprocal Tariffs and Trafficking Tariffs." Instead, the CAFC concluded that tariffs are a core congressional power, and any attempts by the executive to use IEEPA to justify tariffs with such "staggering" impacts would run afoul of the nondelegation and major questions doctrines. Four Judges concurred separately to state that they additionally believed that IEEPA did not authorize any tariffs at all, but this reasoning was explicitly not adopted by the majority opinion.
Though the CAFC affirmed both the CIT's holding that the Trafficking and Reciprocal Tariffs exceeded presidential authority, the CAFC vacated the CIT's injunction and remanded for the CIT to reconsider whether that relief remained appropriate in light of the Supreme Court's recent holding on national injunctions in Trump v. CASA, Inc., which rejected the use of universal injunctions if they are broader than necessary to redress the plaintiff's injury.
Additionally, although the CAFC found that these tariffs were unauthorized under IEEPA, it issued an order preventing its judgment from taking effect until October 14, 2025 to allow parties to appeal to the US Supreme Court. On September 3, 2025, the US government petitioned the Supreme Court to hear the appeal. It also filed a motion to expedite the case, asking the Supreme Court to accept it promptly, hear arguments in early November, and issue its ruling as quickly as possible. The Supreme Court is not required to hear the case, but it is expected to do so. If the Supreme Court takes up the case, a decision could come by early 2026 or perhaps even late 2025.
Separate Supreme Court Challenges to Tariff Authority
No party contested the CIT's jurisdiction in the instant litigation, but the Federal Circuit addressed it at length and confirmed that the CIT was the proper forum for these tariff challenges. The CIT has exclusive jurisdiction over any civil action that arises out of a law of the United States that provides for tariffs. The Federal Circuit explained that because the claims in this case arose out of modifications to the Harmonized Tariff Schedule of the United States ("HTSUS"), the statute which sets US tariff schedules, this case was clearly within the CIT's exclusive jurisdiction.2
In a parallel case, Learning Resources v. Trump, the DC District Court arrived at a different conclusion, holding that it had jurisdiction to enjoin tariff collection under the IEEPA.3The DC District Court explained that because, in its view, IEEPA did not authorize tariffs, challenges to tariffs stemming from IEEPA were outside of the CIT's exclusive jurisdiction.
The plaintiffs in Learning Resources subsequently sought certiorari before judgment in the Supreme Court, and the case has been scheduled for the Court's conference on September 29, 2025, for the Justices to decide whether to take the case directly from the district court, bypassing the pending DC Circuit appeal.4The question of jurisdiction will be essential as additional challenges may surface against some of the other IEEPA-based tariffs. Plaintiffs in Learning Resources requested that the Supreme Court align the merits briefing schedules of both IEEPA challenges.
Conclusion and Next Steps
In the interim, the Federal Circuit's decision that the President does not have the power to impose emergency tariffs on dozens of trading partners under IEEPA injects substantial uncertainty into US trade relations. If the Supreme Court litigation ultimately confirms that the tariffs were unlawful, the government could be liable for massive duty refunds, including interest, to importers. In the meantime, trading partners affected by the tariffs, such as the EU, China, and Canada, among others, are closely watching the progress of this litigation. Notably, though this ruling does not disturb any other IEEPA tariffs currently in effect, the language of the decision – which cites to "the President's continued invocation of IEEPA to impose additional expansive tariffs during the pendency of this appeal" – could apply with equal force to invalidate those tariffs as well.
For now, importers should continue to monitor the litigation. In the event that these IEEPA tariffs are ultimately declared unlawful, importers should closely examine the scope of any remedy granted, including via any remand proceedings before the CIT on that issue. If the remedy granted is narrow (i.e., limited to the parties this lawsuit), importers may need to take administrative action before US Customs and Border Protection, or seek their own relief at the CIT (either individually or by joining a class action) in order to secure refunds of the IEEPA tariffs they have paid.
On September 9, 2025, the Supreme Court ruled that it will take on both IEEPA cases on a consolidated basis this fall, with briefing to start next week and oral argument in early November. A final decision could be issued as early as the end of the year.
In the meantime, Steptoe's Trade Policy team can help you navigate these developments, assess your potential exposure, and evaluate strategies to mitigate the impact of the rapidly shifting tariff regimes.
1V.O.S. Selections, Inc. v. Trump, Nos. 25-1812, -1813 (Fed. Cir. Aug. 29, 2025) (en banc) (per curiam). See also. V.O.S. Selections, Inc. v. United States, 772 F. Supp. 3d 1350 (Ct. Int'l Trade 2025)
219 U.S.C. § 3004(c)(1)(A), (C)
3The D.C. District Court reasoned in Learning Resources, Inc. v. Trump that IEEPA's general authorization to "regulate … importation" does not encompass tariff powers, and therefore suits over IEEPA tariffs could proceed in district court. The CIT and the CAFC disagreed. See infra.
4Learning Resources, Inc. v. Trump, No. 25-5202 (D.C. Cir. pending, merits briefing complete, oral argument scheduled for Sept. 30 , 2025); Docket for 24‑1287 (No. 24‑1287, Learning Resources, Inc., et al. v. Donald J. Trump, President of the United States, et al., filed June 17, 2025, scheduled for conference of Sept. 29, 2025) (internal Supreme Court docket entry), available at https://www.supremecourt.gov/search.aspx?filename=%2Fdocket%2Fdocketfiles%2Fhtml%2Fpublic%2F24-1287.html
