President Trump threw global trade into chaos when he unilaterally declared new tariffs on American trading partners on “Liberation Day,” with the International Emergency Economic Powers Act (IEEPA) invoked to justify the new, higher tariffs. The president’s authority to impose sweeping tariffs was called into question on May 29, when the U.S. Court of International Trade (CIT) voided Trump’s IEEPA tariffs. Here, Stanford Law’s Alan Sykes, an expert in trade policy and international economic relations, discusses Trump’s tariffs, the CIT ruling, and the administrations’ appeal.

Can you explain the IEEPA and what the act authorizes?

Following the declaration of a national emergency by the President, the act authorizes a wide range of measures to address the emergency.  These include the authority to “regulate” “importation,” which the administration has used to justify tariffs.  They have been imposed in response to two “national emergencies,” the first involving drug trafficking (with the focus on Mexico and Canada) and a second (associated with “Liberation Day”) involving persistent bilateral and aggregate trade deficits (leading to tariffs against all trading partners, with a minimum rate of 10 percent).

Is this unprecedented? Is there an example of when this has happened before?

No president has used IEEPA to impose tariffs before.  President Nixon used an earlier law, the Trading with the Enemy Act, to impose a temporary import surcharge in response to a balance of payments emergency around the time that the United States abandoned the gold standard.

The US Court of International Trade (CIT) voided Trump’s IEEPA tariffs. Can you explain the court’s ruling?

The CIT held that even if IEEPA authorizes tariffs under certain circumstances, it does not authorize the “unbounded” tariffs imposed by President Trump, at any level chosen by the President for any length of time.  Such an interpretation would represent an abdication of Congressional power to set tariffs under Article 1 of the Constitution and could run afoul of non-delegation and major question principles according to the CIT.  The court thus interpreted IEEPA to provide more modest powers, without saying definitively what the limits are.  The court further held that the tariffs imposed in response to drug trafficking and related concerns are invalid because they do not directly address the underlying emergency but are enacted simply to gain leverage over Canada and Mexico to coerce greater efforts on their part to combat trafficking.

Do you agree with the ruling?

The result seems correct to me, and indeed I was a signatory on an amicus brief filed in the case in support of the plaintiffs.  I do not believe that Congress intended to give the President the power to redo national trade policy and abandon our international legal obligations wholesale in response to a Presidential declaration of “emergency,” and I do not believe that a fair reading of the statutory text requires a contrary view.

The White House has appealed the CIT’s ruling. What do you think of the appeal’s argument?

I do see some possible vulnerabilities in the court’s reasoning that may surface on appeal, and the Federal Circuit is apparently going to hear the case on an accelerated basis en banc.  Had I been a judge on the panel, I might have done more to cabin the concept of a “national emergency”— we have had aggregate trade deficits for the last half century and will continue to have them as long as our aggregate national savings fall below aggregate national investment (thus requiring us to import capital), as seems likely to be the case for the foreseeable future.  Bilateral trade deficits are a certainty every year.  To call the situation an “emergency” strikes me as absurd.

How should trading partners respond considering the CIT ruling?

Some may be tempted to eschew negotiations with the United States in the hope that the bulk of the tariffs will go away.  That is a risky strategy because the CIT ruling faces an appeal, and because the administration has other statutes that allow it to impose tariffs.  Existing steel and aluminum tariffs are predicated on a threat to “national security,” under authority in the Trade Expansion Act of 1962.  Many tariffs on China, including the ones imposed in the first Trump administration, are based on the Trade Act of 1974 which allows the President to impose tariffs (among other actions) in response to foreign trade practices that are deemed “unreasonable” and burden U.S. commerce.  The administration could deem drug trafficking to be a “national security” issue and use the 1962 Act.  It might declare that trade deficits are all the result of “unreasonable” trade practices and use the 1974 Act. More broadly, the US Trade Representative issues an annual report on “Foreign Trade Barriers” (https://ustr.gov/sites/default/files/files/Press/Reports/2025NTE.pdf), which lists numerous “trade barriers” facing U.S. exporters in the market of every significant U.S. trading partner, including those with which we have a trade surplus or a free trade agreement.  A determination that such barriers are “unreasonable” would trigger authority for the President to impose tariffs under the 1974 Act. These statutes require some predicate agency findings before they can be invoked, but those are not likely to be a major obstacle if the administration is determined to stick to its trade war strategy.  Even if trading partners hold out some hope that legal maneuvers will stall Trump’s agenda, therefore, they might be wise to explore whether politically palatable “deals” can be cut as a backstop.

Is it realistic to expect Congress to reassert its authority over trade agreements?

Realistically, nothing is likely to happen in the near term.  Republican majorities are unlikely to pass legislation that hamstrings the Trump agenda, and even if Congress were to act it would face the prospect of a Presidential veto.  Veto proof majorities to undo administration trade policies are extremely unlikely.  Over the long run, however, one hopes that Congress will act to rein in Executive authority over trade policy, and that some future President will be willing to go along.

Alan O. Sykes is a leading expert on the application of economics to legal problems whose most recent scholarship is focused on international economic relations. His writing and teaching have encompassed international trade, torts, contracts, insurance, antitrust, international investment law and economic analysis of law. In 2010, he founded Stanford Law School’s LLM program in International Economic Law, Business and Policy (IELBP). Professor Sykes has been a member of the executive committee and the board of the American Law and Economics Association, and served as reporter for the American Law Institute Project on Principles of Trade Law: The World Trade Organization. He is on the Board of Editors for the Journal of International Economic Law, the World Trade Review, and a member of the editorial board of the American Journal of International Law. He formerly served as an editor of the Journal of Legal Studies and the Journal of Law and Economics. He is also a former National Science Foundation graduate fellow in the Department of Economics at Yale University. He is Professor of Law and Warren Christopher Professor in the Practice of International Law and Diplomacy and a Senior Fellow at SIEPR.