Court of International Trade Hears Arguments Against Trump Tariffs

A three-judge panel at the U.S. Court of International Trade this week heard oral arguments in V.O.S. Selections v. Trump, one of several pending challenges to the “Liberation Day” tariffs imposed on April 2. This is the first of those legal challenges to reach oral argument on the merits and will set the pace for the other challenges.

The suit was brought by several small business entities and focuses solely on the so-called “reciprocal” tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The suit does not challenge the tariffs enacted to combat fentanyl trade or the Canada/Mexico tariffs, but does challenge the president’s authority to impose tariffs under IEEPA, which is the same statute on which the fentanyl and Canada/Mexico tariffs are based.

The judges seemed concerned with the breadth of the claimed Congressional delegation. The judges also evaluated whether it had authority to review the tariffs at all under the theory that courts should not review “political questions.” The case also involves constitutional questions, which the judges spent significant time discussing.

The judges and parties evaluated the applicability of the closest precedent to this case, U.S. v. Yoshida Intn’l., Inc., which arose when the Nixon administration imposed a 10% ad valorem tax on all imports to the United States under the Trading With the Enemies Act. If Yoshida is considered binding and applicable, it will likely result in the tariffs being upheld. However, if the court distinguishes the current tariffs from Yoshida, it may hold that the tariffs exceed the president’s authority under IEEPA. 

The Court of International Trade panel comprises three U.S. judges appointed over the years by Presidents Reagan, Obama and Trump.

Regardless of how the court rules, V.O.S. Solutions will almost certainly be appealed to the Federal Circuit Court of Appeals and could potentially reach the U.S. Supreme Court, as it presents an issue of first impression.

This case will also likely proceed ahead of the other legal challenges to the various tariffs imposed using IEEPA, though the Court of International Trade has not announced any decision regarding whether the other cases will be consolidated or put on hold pending an outcome in V.O.S. Solutions. There are also three cases challenging the tariffs that were filed in Federal District Courts, which may be transferred to the Court of International Trade, consolidated, and held in abeyance pending a result in V.O.S. Solutions.

NAHB staff will continue to monitor the pending tariff litigation.