On May 28, 2025, the U.S. Court of International Trade (CIT) issued a significant ruling in V.O.S. Selections Inc. et al. v. Trump and State of Oregon et al. v. Trump, declaring that the tariffs imposed under the International Emergency Economic Powers Act (IEEPA) are unlawful. The court held that IEEPA does not authorize the imposition of tariffs and therefore vacated the executive orders that had established both the fentanyl tariffs on goods from China, Canada, and Mexico, and the reciprocal tariffs on goods from all other countries.
The court entered a permanent injunction against the imposition of the tariffs and directed that CBP cease its collections. The court has given agencies ten days to file memoranda indicating how they have implemented the judgment.
Following the decision, the U.S. government filed an immediate appeal. On May 29, the U.S. Court of Appeals for the Federal Circuit granted a temporary stay of the CIT's ruling, meaning that the IEEPA tariffs remain in effect while the appeal is under consideration. Importers are still required to declare entries under the relevant provisions of HTSUS Chapter 99 and continue paying the applicable duties.
As a result of the stay, tariff collection is expected to continue in the short term. It remains unclear if or when refunds will be issued, or whether the refund process will be automatic. While no immediate action is required to preserve refund rights, importers should monitor the liquidation of entries subject to IEEPA tariffs. Filing protests after liquidation may become necessary depending on the outcome of the appeal and subsequent legal developments. If the outstanding Section 301 litigation is representative of how this IEEPA case will unfold, this could go unresolved for years to come.
This ruling does not impact tariffs imposed under other trade statutes, including Section 232 tariffs on steel, aluminum, and automobiles/auto parts, or the Section 301 tariffs on goods from China.
Further developments are expected as the appeals process moves forward. We will continue to monitor the situation and provide relevant updates.