On 28 May 2025, the US Court of International Trade blocked the tariffs imposed by Trump’s administration under the International Emergency Economic Powers Act.
What has happened?
A panel of judges ruled that the Trump administration cannot use the International Emergency Economic Powers Act (IEEPA) to impose tariffs of the scale currently seen, judging the current 10% baseline tariff and other tariff increases - including those additional rates levied against Canada, China and Mexico - to be unconstitutional. The court held that 'trade deficits' - cited by Trump as the reason for his sweeping tariffs - do not meet the test on an 'unusual and extraordinary' threat in line with IEEPA.
This ruling does not affect sectoral tariffs - tariffs imposed under Section 232 (including steel, aluminium and auto imports) will remain in place. This ruling will also not impact the administration's ability to impose other sectoral tariffs under Section 232.
The court confirmed that the President could use Section 122 of the 1974 Trade Act to impose 15% tariffs for up to 150 days in order to address a balance of payments deficit or Section 301 to address unfair trade practices.
The ruling gives the administration ten days to stop the collection of tariffs - i.e. by Saturday 7 June.
Could the administration use any other levers to impose tariffs?
In short, yes. The administration has other legal levers it can pull to impose tariffs similar to its 10% baseline.
For example, the administration could replace the 10% baseline rate with a similar tariff of up to 15% under Section 122 (as cited above). These tariffs only stay in place for 150 days, though it is unclear as to whether this 150-day period could restart again once reached.
The US Trade Representative could launch more Section 232 investigations to cover other sectors or Section 301 investigations into key trading partners. It is unlikely that a Section 301 investigation would be launched against the UK given the recent announcement of the UK-US Economic Prosperity Deal.
What comes next?
The Trump administration has already filed an appeal to the US Court of Appeals, which could then be appealed again to the Supreme Court. Decisions from either of these are unlikely in the next ten days.
What is the CBI doing?
The CBI continues to share insights with government at all levels - from ministerial to working officials. We are keen to hear how your organisation is impacted by US trade policy decisions and the steps you are taking to mitigate any direct or indirect impacts.
Please get in touch with Erin Henwood to discuss your views.
