BREAKING: Fentanyl, Reciprocal Tariffs Struck Down, Other Tariff On The Way?
On May 28, 2025 a three-judge panel at the U.S. Court of International Trade (“CIT”) issued a final
judgement vacating and permanently enjoining the Fentanyl Tariffs, as well as the Reciprocal Tariffs. This
order has tremendous implications for international trade: worldwide tariffs will be eliminated, and
scheduled raises in the Reciprocal Tariff will be canceled.
Caution is advised, however, because this decision is pending appeal. Until further notice, the tariffs
remain in effect. Moreover, in its ruling the CIT has identified a different law allowing the President to
temporarily impose global tariffs up to 15%.
Background
On February 1, 2025, President Trump signed three executive orders related to the trafficking of fentanyl
into the United States: Executive Order 14193, Imposing Duties to Address the Flow of Illicit Drugs
Across Our Northern Border, 90 Fed. Reg. 9113; Executive Order 14195, Imposing Duties to Address the
Synthetic Opioid Supply Chain in the People’s Republic of China, 90 Fed. Reg. 9121; Executive Order 14194, Imposing Duties to Address the Situation at Our Southern Border, 90 Fed. Reg. 9117, 9118 (Feb. 1, 2025). These executive orders imposed a 25% duty on goods from Mexico and Canada, and a 10% tariff on goods from China, later 20% (collectively the “Fentanyl Tariff”).
Then, on April 2, 2025, President Trump signed another executive order related to U.S. trade deficits with
its trading partners, Executive Order 14257, Regulating Imports With a Reciprocal Tariff to Rectify Trade
Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits, 90 Fed. Reg.
15041, which imposed a 10% general duty rate on all countries, and scheduled country-specific rate
increases as high as 50% (the “Reciprocal Tariff”).
The President’s basis for these tariffs was the International Emergency Economic Powers Act of 1977
(“IEEPA”). This legislation allows the President some authority to regulate international trade in response
to an emergency. In this case, fentanyl trafficking and trade deficits were cited as the emergencies giving
rise to the tariffs.
After the imposition of the Reciprocal and Fentanyl Tariffs, a collection of states and private parties sued
the United States in the CIT, challenging the President’s authority to levy such tariffs. On May 28, 2025 the
CIT ruled on a motion for summary judgement, striking the tariffs down as outside the President’s
authority.
Holding: The Tariffs Are Unconstitutional
Overall, the CIT ruled that IEEPA does not give the President unlimited tariff authority. For the
Fentanyl and Reciprocal Tariffs respectively, the reasoning was different.
The CIT struck down the Fentanyl Tariffs because it found them not sufficiently related to
fentanyl trafficking. The IEEPA grants the President the authority to “deal with” an international
emergency. The CIT found that the Fentanyl Tariffs intend to “create leverage [with other countries] to
‘deal with'” the international fentanyl trade, but do not directly “deal with” the drug trade. Therefore, the CIT found that the Fentanyl Tariffs were unconstitutional, because they are not directly connected to fentanyl trade.
In the case of the Reciprocal Tariff, the CIT struck the tariff down in its current form, but found that the
Trump Administration could impose similar tariffs under a different law.
The CIT struck down the Reciprocal Tariff because the Trump Administration used the IEEPA as the basis
for its authority to deal with trade deficits. The CIT found that, instead of IEEPA, the President has a more
limited, non emergency power to impose tariffs under Section 122 of the Trade Act of 1974 (“Section
122″). Therefore, the President could still impose tariffs in response to trade deficits, but he must use
Section 122, rather than the IEEPA.
Section 122 Tariffs?
Section 122 gives the President the authority to impose “a temporary import surcharge, not to exceed 15
percent ad valorem, in the form of duties (in addition to those already imposed, if any) on articles imported into the United States,” in order to “deal with large and serious United States balance-of-
payments deficits.” These tariffs can last up to 150 days, unless extended by Congress.
The CIT found that the trade deficits cited in the Reciprocal Tariff fall outside the scope of IEEPA, but do
qualify under Section 122. This means that, while the Reciprocal Tariffs have been struck down in their
current form, they may return under Section 122.
Section 122 is more limited in time and scope compared to IEEPA. The maximum rate under Section 122
would be 15%, as opposed to unimited under the Reciprocal Tariff. Additionally, Section 122 tariffs can
last up to 150 days without an extension, while the current Reciprocal Tariffs are indefinite.
In summary, while the Reciprocal Tariffs may be eliminated in the short term, the CIT’s opinion finds that
the President has the authority to place a tariff of up to 15% on all imports in response to a trade deficit.
Therefore, it is possible that in the coming days we may see the Reciprocal Tariffs return, at least in part,
under Section 122.
Judgment Stayed
Since the CIT’s decision, the United States Court of Appeals For The Federal Circuit has issued an order
staying the order of the CIT until further notice. The stay will likely remain in effect while the appeals court
considers the case. In the meantime, CBP will likely continue to collect the tariffs.
Conclusion
This concludes our analysis of the available information. The CIT has ruled that the Reciprocal and
Fentanyl Tariffs are unconstitutional, and have enjoined their enforcement. The status quo is will remain
unchanged for the time being, however, because the appeals court has stayed the lower court’s order.
Additionally, any tariff reprieve may be short lived, as the CIT outlined a different law the Trump
Administration may use to impose tariffs up to 15%.
As new tariff regulations continue to evolve, navigating these changes requires experienced legal counsel.
At Liang + Mooney, PLLC, our seasoned tariff lawyers can answer your questions and concerns with
sophisticated legal solutions. If you seek strategic counsel and insight into which tariffs apply to your
operations, we invite you to contact us to schedule a consultation.