A landmark lawsuit filed in the US Court of International Trade challenges President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose sweeping global tariffs. The case could fundamentally alter Trump’s ability to enact his aggressive tariff agenda, potentially stripping him of the authority to use the IEEPA for such measures and forcing the removal of existing tariffs.
The IEEPA, enacted in 1977, empowers the US President to regulate international commerce in response to an “unusual and extraordinary threat” from abroad, provided a national emergency is declared.
Historically, the IEEPA has been employed to impose sanctions, freeze assets, and restrict financial transactions – measures typically targeting foreign adversaries or security threats.
However, on 2 April, Trump invoked the IEEPA in a novel way by issuing Executive Order 14257, announcing his “Liberation Day” tariffs. These tariffs included a 10% levy on nearly all imports globally, with higher rates – such as 20% on Chinese goods and 15% on imports from Mexico and Canada – targeting specific countries. The administration justified this action by citing national emergencies such as trade deficits, unfair foreign trade practices, and the influx of fentanyl into the US.
Critics argue the IEEPA was not intended for broad trade policy, traditionally a domain reserved for Congress under the Constitution. This set the stage for the lawsuit filed less than two weeks later.
The parties involved
The lawsuit, V.O.S. Selections, Inc v Trump, was initiated by the Liberty Justice Center, a public interest law firm, representing five small and mid-sized US businesses heavily reliant on imported goods.
The businesses are V.O.S. Selections, Inc, a New York-based wine and spirits importer; Plastic Services and Products, LLC (operating as Genova Pipe), a supplier of plastic products; MicroKits, LLC, a Virginia-based manufacturer of educational kits and musical instruments; FishUSA Inc, a retailer of fishing equipment; and Terry Precision Cycling, LLC, a supplier of cycling components.
These businesses claim the tariffs impose severe economic burdens, threatening their operations and long-term viability, without the congressional oversight required by law.
The defendants include Trump and other administration officials responsible for enacting and enforcing the tariffs.
Filed on 14 April, the case seeks a declaratory judgment and injunctions to stop the tariffs.
An emergency motion for a temporary restraining order and preliminary injunction, filed on 18 April, was denied on 22 April because of insufficient evidence of immediate harm.
Oral arguments were held before a three-judge panel on 13 May.
The panel consists of Gary Katzmann (appointed by President Barack Obama), Jane Restani (a Reagan appointee), and Timothy Reif (a Trump appointee), whose varied backgrounds may shape the ruling.
Arguments by the parties
The plaintiffs present two core arguments:
- Article I, Section 8 of the US Constitution grants Congress the exclusive power to “lay and collect taxes, duties, imposts, and excises” and to regulate commerce with foreign nations. The plaintiffs assert that by imposing tariffs under the IEEPA, Trump has usurped Congress’s authority, bypassing the legislative process.
- The plaintiffs argue the IEEPA does not authorise the imposition of tariffs. They note that the statute has historically been used for targeted economic measures such as sanctions and asset freezes, not for broad trade policies. They contend the administration’s interpretation stretches the IEEPA beyond its intended scope, lacking clear congressional authorization.
Jeffrey Schwab, senior counsel at the Liberty Justice Center, has framed the tariffs as an “enormous usurpation” of legislative power, emphasising that such significant economic actions require congressional approval.
The administration, defended by the Department of Justice, counters with the following:
- The IEEPA explicitly allows the president to “regulate or prohibit” transactions involving foreign property during a national emergency. The defendants argue this broad language encompasses tariffs, particularly when justified by economic and security threats such as trade imbalances and drug trafficking.
- The administration asserts that Congress delegated significant authority to the president under the IEEPA, providing the flexibility needed to address modern economic challenges. They maintain the courts should defer to the executive’s interpretation, particularly in areas involving national security and foreign policy.
During oral arguments, the administration also claimed the judiciary lacks the authority to review the tariffs’ legality, although this position faced scepticism from the presiding judges.
Legal analysts expect a decision within weeks, potentially by early June, given the case’s expedited nature and economic stakes. However, no specific date has been confirmed, and an appeal to the US Court of Appeals for the Federal Circuit – or even the Supreme Court – remains likely, depending on the outcome.
If Trump loses, an injunction will likely lift the tariffs, but a stay during appeals might keep them in place temporarily, prolonging uncertainty over his tariff authority.
Related legal challenges
The V.O.S. Selections lawsuit is one of several legal challenges to Trump’s tariff policy:
New Civil Liberties Alliance. Filed in the US District Court for the Northern District of Florida, this case contests the 20% tariffs on Chinese imports, arguing that they exceed the IEEPA’s scope. It mirrors the V.O.S. Selections claims about executive overreach.
California and 11 States. Led by California, this lawsuit, also filed in federal district court, asserts that tariffs require congressional approval, reinforcing the constitutional argument central to the trade court case.
Trump could use other legal tools
V.O.S. Selections tests key legal principles such as the major questions and non-delegation doctrines, which could curb unilateral presidential tariff imposition.
A ruling against Trump would likely deem the tariffs unlawful, mandating their elimination and possibly requiring refunds for businesses already burdened by the costs, with ripple effects on global trade dynamics already disrupted by these policies.
However, Trump retains other legal tools, such as section 232 of the Trade Expansion Act for national security or section 301 of the Trade Act for unfair trade practices, as used during his first term.
Thus, while Trump couldn’t use the IEEPA for tariffs, he could potentially impose similar tariffs under different statutes, although that would require separate legal actions and could face further challenges. The outcome could redefine US trade policy, executive power, and global economic relations.
