Earlier this week, the White House filed a motion, calling on the Supreme Court to expedite an appeal on its behalf, following a recent ruling by the U.S. Court of Appeals for the Federal Circuit, which stated the majority of the IEEPA (International Emergency Economic Powers Act) tariffs rolled out by the White House are illegal. Tariffs will remain temporarily in place until October 14, which will give the White House time to appeal its case to the Supreme Court.
As previously reported, this ruling was similar to one made in May, when a three-judge panel at the U.S. Court of International Trade (CIT) ruled that President Trump had misused the International Emergency Economic Powers Act (IEEPA) of 1997, in steps he took to implement tariffs on various consumer and industrial products, including the 10% global tariff on U.S. trading partners, 25% tariffs placed on Canada and Mexico, 30% tariffs on China related to fentanyl and border crisis concerns, the elimination of the de minimis exemption on imports from China and called for a permanent halt of the majority of tariffs and also ruling against future modifications against them, the White House received a reprieve one day later.
In its motion, the White House explained that the Federal Circuit’s ruling has created what it called legal uncertainty and is undermining U.S. diplomatic and economic interests, including ongoing trade negotiations with South Korea, the European Union, and Japan.
“In addition to the frameworks already reached and which continue to be negotiated towards binding agreements, the United States is actively negotiating with many other countries to reach ways forward to address the emergencies declared by the President,” the White House said in its motion. “The recent decision by the Federal Court is already adversely affecting ongoing negotiations. World leaders are questioning the President’s authority to impose tariffs, walking away from or delaying negotiations and or imposing a different calculus on their negotiating positions. The court’s ruling has taken away substantial negotiating leverage for the President to achieve the best deals for the American people. The longer a final ruling is delayed, the greater the risk of economic disruption. For example, delaying a ruling until June 26 could result in a scenario in which 750 billion to 1 trillion in tariffs have already been collected, and unwinding them could cause significant disruption.”
An update issued by San Francisco-based global freight forwarder Flexport said that if the Supreme Court upholds the federal appeals court’s ruling, CBP would halt all collection of IEEPA tariffs and many businesses would potentially qualify for duty refunds. It added that some duties would be proactively refunded by CBP, while others would require importers to file post summary corrections and protests.
A New York Times report stated that the White House told the court that weakening the administration’s tariffs “could unleash economic chaos,” specifically in regard to trade agreements the U.S. has made with other nations’ governments.
These developments come at a time when supply chain decision-makers continue to navigate tariff- and trade-driven uncertainty on various fronts, including: where to invest; how much capital should be allocated for investments; hiring decisions; and the potential need to reconfigure supply chains, among others.
Prior to the May stay being granted, an industry observer told LM that there are expected to be various impacts, should tariffs eventually be removed, including on economic activity, inventory front-loading, and the since-passed budget bill moving through Congress, at the time, as it pulls the tariff revenue out of it.
An S&P Global Market Intelligence research report issued earlier this summer said that should the initial CIT ruling be upheld, it would remove roughly half of U.S. imports from tariff coverage, while adding that in terms of the overall impact on supply chain costs, the White House still has other channels to increase import costs, so businesses may still not have enough certainty to plan their investments and production.
“The sectors that would benefit most from the IEEPA duties being overturned are consumer goods industries where mainland China has a high proportion of U.S. imports,” the report stated. “Among the larger import sectors those include toys (75.8% imported from mainland China in 2024), homewares (75.1%) and audio-visual equipment (37.0%) among others. All three are also highly seasonal and face sourcing uncertainties heading into the peak shipping season, which typically involves exports from Asia running from June through September. Thus far, companies have focused on tactical actions including inventory front-loading, price increases and cost negotiations, and may continue to do so during the period of tariff uncertainty.”
