by: Ian Sheldon, Professor and Andersons Chair of Agricultural Marketing, Trade, and Policy, Agricultural, Environmental, and Development Economics, Ohio State University
In a recent post to Ohio Ag Manager, it was noted that the United States Court of Appeals for the Federal Circuit had begun deliberations over a ruling by the U.S. Court of International Trade (CIT) against President Trump’s so-called “Liberation Day” tariffs which were based on invoking the International Emergency Economic Powers Act (IEEPA) of 1977 (V.O.S. Selections, Inc. v. United States, CIT, May 29, 2025). On August 29, 2025, the Appeals Court ruled in a 7-4 decision that, “We affirm the CIT’s holding that the…Reciprocal Tariffs imposed by the Challenged Executive Orders exceed the authority delegated to the President by IEEPA’s text. We also affirm the CIT’s grant of declaratory relief that the order are ‘invalid as contrary to law’” (V.O.S. Selections, Inc. v. United States, August 29, 2025, p.44). However, the Appeal Court decision does not take effect until October 14, giving the government time to appeal the decision to the Supreme Court.
In laying out their ruling, the Appeals Court made a number of key points:
(i) none of the actions explicitly allowed under IEEPA include the “…power to impose tariffs, duties, or the like, or the power to tax (V.O.S. Selections, Inc. v. United States, August 29, 2025, p.26-27)
(ii) compared to IEEPA, other statutes such as Section 301 clearly delegate tariff-setting power to the president (V.O.S. Selections, Inc. v. United States, August 29, 2025, p.30)
(iii) typically IEEPA has been invoked to impose financial restrictions or other sanctions on “hostile regimes and individuals” (V.O.S. Selections, Inc. v. United States, August 29, 2025, p.36)
(iv) the court could “…discern no clear congressional authorization by IEEPA for tariffs of the magnitude of the Reciprocal Tariffs…” (V.O.S. Selections, Inc. v. United States, August 29, 2025, p.37)
(v) the court rejected the government’s argument that the United States Court of Customs and Patent Appeals (CCPA) ruling in favor of President Nixon’s application of a 10% tariff on all U.S. imports (United States v. Yoshida Int’l, Inc., November 6, 1975) was existing judicial precedent when IEEPA was enacted;
and (vi)the court points out that the CCPA ruling was based on President Nixon imposing temporary and limited tariffs (V.O.S. Selections, Inc. v. United States, August 29, 2025, p.40).
The overall conclusion of the Appeals Court is that, “…we still must conclude that the Challenged Executive Orders in this case exceed the authority provided by that interpretation of IEEPA…the Reciprocal Tariffs are unbounded in scope, amount, and duration…The…Reciprocal Tariffs assert an expansive authority that is beyond the express limitations of Yoshida II’s holding and, thus, beyond the authority delegated to the President by IEEPA.” (Federal Appeals Court, V.O.S. Selections, Inc. v. United States, August 29, 2025, p.41-42).
Both the CIT and Federal Appeals Court are quite clear in their opinions that the president has exceeded the authority delegated to him by the text of IEEPA. Irrespective of these rulings, in all probability the question of whether or not IEEPA allows the president to apply across-the-board tariffs will now end up at the United States Supreme Court for adjudication.