Latest on IEEPA Court Cases
On May 29, the U.S. Court of International Trade ruled that President Trump exceeded his authority under the International Emergency Economic Powers Act (IEEPA) by imposing tariffs on imports from Canada, Mexico, and China, issuing a permanent injunction against their enforcement. The court found the tariffs were not sufficiently linked to the cited emergencies (immigration, fentanyl trafficking, and trade imbalances) and concluded that IEEPA does not authorize broad tariff-setting powers. In a separate but related case, the U.S. District Court for D.C. issued a preliminary injunction blocking the collection of the IEEPA tariffs from certain plaintiffs, with the judge emphasizing that IEEPA does not allow the president to impose duties without clear congressional authorization. However, later that day, a federal appellate judge issued an administrative stay on the CIT’s ruling. As such, the tariffs remain in effect at this time. The court recently decided to continue the stay, keeping the tariffs in place, and has expedited the proceedings given the case’s “exceptional importance.” It set deadlines for legal briefs in early June and scheduled oral arguments for July 31.
Department of Commerce Adds Products to Section 232 Tariffs
The Department of Commerce (DOC) has announced that, effective June 23, additional steel derivative products will be subject to tariffs, with duties assessed based on the steel content of each product. These items include certain refrigerator-freezers, dryers, washing machines, dishwashers, cooking appliances, and welded wire racks. The revisions were published in the Federal Register as a modification to Annex 1 of the Harmonized Tariff Schedule, following previous presidential directives to adjust steel and aluminum imports. While most tariff codes remain unchanged, the update specifically targets steel-containing consumer goods.
A Pending US-China Trade Deal
A spokesperson for China’s Ministry of Commerce affirmed President Trump’s claim that a U.S.-China trade deal on rare earths and semiconductors was “done,” describing the recent talks in London as a framework building on previous negotiations in Geneva. The spokesperson confirmed some progress and noted that export licenses for rare earths would be granted based on reasonable demand, with compliant applications already approved. President Trump, presented the deal as finalized pending his and President Xi’s approval, highlighting terms including 55% U.S. tariffs, 10% Chinese tariffs, rare earth supply commitments, and continued Chinese student access to U.S. universities. Commerce Secretary Howard Lutnick echoed that the agreement was essentially a “handshake for a framework," awaiting final sign-off by both leaders.
President Trump and Treasury Secretary Comments on Reciprocal Tariffs
President Trump said the administration will soon unilaterally release the specific tariff rates for certain countries “over the next week or two,” emphasizing that this step is necessary and signaling that he isn't expecting to delay the July 8 deadline for implementing higher tariffs. Treasury Secretary Scott Bessent echoed this timeline to lawmakers during a House Ways and Means hearing. The Trump Administration initially set the deadline after announcing a new tariff regime on April 2 targeting trade deficits, but postponed enforcement to allow time for negotiations. While only a framework agreement with the U.K. has been announced so far, Commerce Secretary Howard Lutnick said multiple deals are forthcoming, possibly starting next week. Negotiations with the European Union have been the most challenging, and any deal with the EU is expected to be finalized last due to the complexity of working with its 27 member states.
Read the last alert from the MBS team here.
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Are you concerned about the impacts of the outlined trade issues? Please contact Sarah Helton, Michael Best Strategies’ Trade Practice Lead at sarah.helton@michaelbest.com for assistance.