On May 29, 2025, the Court of Appeals for the Federal Circuit (CAFC) stayed the decision of the Court of International Trade (CIT) from the previous day, which had vacated both tranches of President Donald Trump’s tariffs implemented under the International Emergency Economic Powers Act of 1977 (IEEPA) (50 U.S.C. § 1701 et seq.). President Trump had invoked IEEPA to impose so-called “reciprocal” tariffs against nearly every country in the world (see Update of April 10, 2025) and specific tariffs against Canada, Mexico (see Update of March 6, 2025) and China (see Update of May 12, 2025). As a result of the stay, the two tranches of tariffs remain in effect pending the CAFC’s review of the motion to stay of the CIT’s judgment and injunction. The CIT’s per curiam decision, however, places the burden on the Trump administration to continue defending the position that IEEPA is a valid legal basis for the tariffs.

The CIT Decision

Heard by a three-judge panel (one Reagan appointee, one Obama appointee, and one Trump appointee), the CIT case consolidated two of seven lawsuits currently challenging IEEPA as a lawful means to impose tariffs—one filed by five small businesses and the other filed by Oregon (and joined by eleven other states). The CIT panel ultimately ruled that the challenged tariffs “exceed any authority granted to the President by IEEPA to regulate importation,” and laid out three key reasons for this conclusion.

The CIT panel grounded their decision in a structuralist interpretation of U.S. law, emphasizing that while IEEPA grants the President some authority to “regulate…importation,” the Constitution explicitly assigns the power to impose tariffs to Congress. Given “the Constitution’s express allocation of the tariff power to Congress,” the judges explained, IEEPA cannot be read “to delegate an unbounded tariff authority to the President.” Such a reading is necessary to “avoid constitutional infirmities” and reinforce the principle that Congress, not the President, holds the primary authority over tariffs.

The CIT panel considered the legislative intent behind IEEPA, which was enacted after the Watergate scandal to limit, not expand, presidential power. According to the panel, interpreting the statute now to allow broad tariff authority would undermine the rationale for why Congress passed IEEPA. The CIT panel acknowledged that President Trump’s reciprocal tariffs — which were intended to address trade imbalances, a type of balance-of-payments deficit — could potentially proceed under Section 122 of the Trade Act of 1974; this provision, however, only allows for emergency tariffs up to 15% and only for 150 days (i.e., about five months). After that time period expires, Congress must approve any extension.

The CIT panel embraced a textualist argument to address the specific tariffs imposed against Canada, Mexico, and China, which President Trump justified on the grounds that these countries were failing to “arrest, seize, detain, or otherwise intercept” drug trafficking organizations, human traffickers, and criminals at large. The CIT pointed out that any measures undertaken pursuant to IEEPA must “deal with an unusual and extraordinary threat,” but the phrase “deal with” necessitates “a direct link between an act and the problem it purports to address.” The panel found that “Customs’s collection of tariffs on lawful imports does not … relate to foreign governments’ efforts to arrest seize, detain, or otherwise intercept” bad actors.

The CIT panel concluded that “the challenged Tariff Orders are unlawful as to Plaintiffs [as] they are unlawful … to all,” and issued a nationwide injunction to halt the tariffs—marking a significant limitation on the President’s ability to use IEEPA as a tool for imposing tariffs.

Tariffs Under Other Statutes Not Affected

This CIT ruling does not invalidate or otherwise impact tariffs implemented by President Trump under Section 301 of the Trade Act of 1974 and under Section 232 of the Trade Adjustment Act of 1962.

On May 23, 2025, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Syria General License (GL) No. 25 relaxing sanctions against the Government of Syria and twenty-eight (28) previously blocked Syrian entities and persons. GL 25 authorizes transactions that would otherwise be prohibited under the U.S. economic sanctions on Syria, including new investment in Syria; the provision of financial and other services to Syria; and transactions related to Syrian-origin petroleum or petroleum products. This general license does not authorize any transactions with individuals or entities that remain on OFAC’s Specially Designated Nationals (SDN) List or the unblocking of any blocked property.

In a press release, Treasury stated that this was a “first step” in providing relief for Syria in line with President Donald Trump’s announcement for the cessation of all sanctions on Syria. OFAC has also issued a set of FAQs to provide further guidance related to GL 25.

It should be noted that this General License impacts only the Syrian Sanctions Regulations under 31 C.F.R. Part 542 and under the control of OFAC. Certain statutory export controls and restrictions currently remain in place under the control of the Department of Commerce’s Bureau of Industry and Security (BIS).

On May 16, 2025, Customs and Border Protection (CBP) issued a Notice to implement President Donald Trump’s earlier Executive Order (EO) 14289 that eliminated the “stacking” (or accumulation) of certain overlapping tariffs. These overlapping tariffs included the IEEPA tariffs on Canada and Mexico, the Section 232 automobile and automotive part tariffs, and the Section 232 steel and aluminum tariffs. For details, See Thompson Hine Update of April 30, 2025.

Importantly, the CBP Notice states that beginning on May 16, 2205, importers may request a refund of tariffs that were previously stacked in contradiction to this order. Importers may file a post summary correction (PSC) for unliquidated entries or file a protest under 19 U.S.C. 1514 for entries that have been liquidated but for which the protest period has not yet expired. 

On May 12, the U.S. Department of Justice (DOJ) issued updated policy memoranda relating to the investigation and prosecution of white collar crimes, including its White-Collar Enforcement Plan, Revised Corporate Enforcement and Voluntary Self-Disclosure Policy, Memorandum on Selection of Monitors in Criminal Division Matters, and the Criminal Division’s Corporate Whistleblower Awards Pilot Program Revisited. These memoranda should guide companies, executives, and compliance professionals in handling matters relating to their operations, compliance, reporting obligations, and potential investigations and prosecution.

This client update outlines our top five takeaways from the memoranda:

  • Trade Crimes Enforcement Is a New Major Focus
  • Waste, Fraud, and Abuse of Government Programs and Procurement Fraud Remain Top Priorities
  • Companies in International Supply Chains Face Unique Challenges
  • Corporate Self-Disclosure Requires Strict Compliance and Forthright Disclosures
  • It’s Never Too Early to Engage White Collar Counsel

View the entire client update in HTML or PDF format.

On May 13, 2025, the Department of Commerce announced that it was rescinding a January 15, 2025 Interim Final Rule that revised the controls under the Export Administration Regulations (EAR) on advanced computing integrated circuits (ICs) and added a new control on artificial intelligence (AI) model weights for certain advanced closed-weight dual-use AI models.  See Thompson Hine Update of January 21, 2025.  Certain compliance requirements with this rule were set to become effective on May 15; however, Bureau of Industry and Security (BIS) officials have been told not to enforce the Interim Final Rule.  BIS plans to publish a Federal Register notice formalizing the rescission and will issue a replacement rule in the future.  

On May 12, 2025, the United States and China issued a Joint Statement concerning recent trade negotiations and commitments to several “mutually beneficial economic” actions in the two countries’ trade relationship. Accordingly, no later than May 14, 2025:

  • The United States will (i) modify the application of the additional ad valorem rate of duty on articles of China (including articles of Hong Kong and Macau) set forth in Executive Order (“EO”) 14257 of April 2, 2025 (i.e. the reciprocal tariffs), by suspending 24% of that rate for an initial period of 90 days, while retaining the remaining ad valorem rate of 10% on those articles pursuant to the terms of that EO and (ii) remove the modified additional ad valorem rates of duty on those articles imposed by EO 14259 of April 8, 2025 and EO 14266 of April 9, 2025 (i.e., both modifying upward the China reciprocal tariff rate).
  • China will (i) modify the application of the additional ad valorem rate of duty on articles of the United States set forth in the Announcement of the Customs Tariff Commission of the State Council No. 4 of 2025 by suspending 24 percentage points of that rate for an initial period of 90 days, while retaining the remaining additional ad valorem rate of 10% on those articles and removing the modified additional ad valorem rates of duty on those articles imposed by the Announcement of the Customs Tariff Commission of the State Council No. 5 of 2025 and the Announcement of the Customs Tariff Commission of the State Council No. 6 of 2025 and (ii) adopt all necessary administrative measures to suspend or remove the non-tariff countermeasures taken against the United States since April 2, 2025.

The United States has indicated that it will retain all duties imposed on China before April 2, 2025, including Section 301 tariffs, Section 232 tariffs, and the 20% tariffs imposed on China in response to the fentanyl crisis pursuant to the IEEPA. Overall, the United States will temporarily reduce tariffs on China to a baseline of 30% (not including the aforementioned potentially applicable Section 301 and Section 232 tariffs). It remains unclear whether these negotiations addressed or will temporarily reduce the application of tariffs on goods entering the United States from China under the “de minimis” rule pursuant to Section 321 of the Tariff Act of 1930 — an exemption allowing imports valued at $800 or less to enter the United States with minimal filing requirements and duty-free.

China has indicated that certain tariffs on U.S. agricultural products and retaliation for the U.S. tariffs issued over fentanyl will remain in place. China will temporarily reduce tariffs on the United States to a baseline of 10% (not including the aforementioned agricultural- and fentanyl-related tariffs). It is also currently believed that in addressing “the non-tariff countermeasures,” China will remove restrictions it recently implemented on the export of rare earth elements and sanctions on certain U.S. companies. 

It is expected that U.S. Customs and Border Protection (CBP) will be issuing clarifying information and guidance shortly via its Cargo Systems Messaging Service (CSMS) regarding the temporary adjustment to applicable tariffs on China.

The two countries will now more formally establish a mechanism to continue discussions on economic and trade relationships.

On May 1, 2025, the Department of Commerce (Commerce) announced that, pursuant to Section 232 of the Trade Expansion Act of 1962, it was initiating an investigation to determine the effects on the national security of imports of commercial aircraft, jet engines, and parts for commercial aircraft and jet engines. Interested parties may submit written comments, data, analyses, or other information to the Office of Strategic Industries and Economic Security at Commerce’s Bureau of Industry and Security (BIS) no later than June 3, 2025.

BIS is interested in comments and information covering: (i) the current and projected demand for commercial aircraft, jet engines, and parts for commercial aircraft and jet engines in the United States; (ii) the extent to which domestic production of commercial aircraft, jet engines, and parts for commercial aircraft and jet engines can meet domestic demand; (iii) the role of foreign supply chains, particularly of major exporters, in meeting U.S. demand for commercial aircraft, jet engines, and parts for commercial aircraft and jet engines; (iv) the concentration of U.S. imports of commercial aircraft, jet engines, and parts for commercial aircraft and jet engines from a small number of suppliers and the associated risks; (v) the impact of foreign government subsidies and predatory trade practices on the competitiveness of the commercial aircraft industry, jet engine industry, and associated commercial aircraft and jet engine part industries in the United States; (vi) the economic impact of artificially suppressed prices of commercial aircraft, jet engines, and parts for commercial aircraft and jet engines due to foreign unfair trade practices and state-sponsored overproduction; (vii) the potential for export restrictions by foreign nations, including the ability of foreign countries to weaponize their control over supplies of commercial aircraft, jet engines, and parts for commercial aircraft and jet engines; (viii) the feasibility of increasing domestic capacity for commercial aircraft, jet engines, and parts for commercial aircraft and jet engines to reduce import reliance; (ix) the impact of current trade policies on domestic production of commercial aircraft, jet engines, and parts for commercial aircraft and jet engines, and whether additional measures, including tariffs or quotas, are necessary to protect national security; and (x) any other relevant factors.

Comments must be submitted via the federal rulemaking portal at www.regulations.gov, under Docket No. BIS-2025-0027. Submitters are directed to refer to XRIN 0694-XC127 in all comments.

On May 8, 2025, the White House published general terms for a future trade deal “to enhance [the] economic partnership” between the United States and the United Kingdom. The general terms, which names the forthcoming agreement as the U.S.-UK Economic Prosperity Deal, “do[] not constitute a legally binding agreement” but rather memorialize a set of “initial proposals” that will be the starting point for formal negotiations. Still, the general term related to tariffs “becomes operative on May 8, 2025,” and will ease some of the tariffs, but not all, that the United States and the United Kingdom levy on each other’s goods.

In total, there are six general terms. However, five of the general terms—the second (addressing non-tariff barriers), third (increasing digital trade), fourth (strengthening alignment and collaboration on economic security), fifth (commercial considerations and opportunities), and sixth (other matters)—are broad reaffirmations of commitments already made by the two countries or are aspirational in nature. For example, the second general term reads, in part: “The United Kingdom and the United States plan to work constructively in an effort to enhance agricultural market access. Further, both countries positively support future discussions to strengthen bilateral agricultural trade.”

By contrast, the first general term addresses tariffs and outlines specific concessions that the two countries are implementing immediately. In particular, the United Kingdom is removing its 20% tariff on U.S. beef, and raising its quota on 1,000 metric tons (mt) of U.S. beef imports to 13,000 mt. Additionally, the United Kingdom is extending a preferential duty-free tariff rate quota on 1.4 billion liters of U.S. ethanol. 

In return, the United States is establishing a tariff rate quota so the first 100,000 vehicles from British automakers face a 10% tariff rate instead of the 25% tariff rate all other automobiles and certain automobile parts incur pursuant to Section 232 of the Trade Expansion Act of 1962 (see Update of April 3, 2025). Section 232 authorizes the president to adjust tariffs on imports deemed a threat to national security after an investigation by the Department of Commerce. The United States will also be “construct[ing] a quota at most favored nation (MFN) rates for UK steel and aluminum and certain derivative steel and aluminum products,” indicating the current 25% tariff on all steel, aluminum, and derivative products under Section 232 will soon be eliminated for the United Kingdom (see Update of March 12, 2025). 

The first general term adds that the United States and United Kingdom will negotiate “preferential treatment outcomes on pharmaceuticals and pharmaceutical ingredients” as well, which seems to preemptively exclude the United Kingdom from higher tariff rates the United States may apply on such products pending the conclusion of a Section 232 investigation (see Update of April 15, 2025).

Although the general terms remain silent regarding whether the United Kingdom will still face the baseline 10% tariff that President Trump levied on all goods worldwide beginning April 5, 2025 (see Update of April 3, 2025), a White House fact sheet hailing the “historic trade deal” clarified that the baseline 10% tariff rate will remain in place on goods from the United Kingdom.

On May 8, 2025, the U.S. Department of the Treasury announced its intent to launch a Fast Track Pilot Program to encourage greater investment in U.S. businesses from allied and partner countries. This initiative will introduce a Known Investor portal, allowing the Committee on Foreign Investment in the United States (CFIUS) to collect information from foreign investors before a formal filing, streamlining the review process for trusted investors.

The pilot program is part of the President’s America First Investment Policy (see Thompson Hine update of February 24, 2025), which aims to increase efficiency in the CFIUS process for investors from countries with clear “independence from foreign adversaries or threat actors.” Treasury Secretary Scott Bessent emphasized that the United States values strong investments from allies and partners and is committed to maintaining an open investment environment while protecting national security.

The Department of the Treasury stated that it will begin with a pilot phase and plans to expand the program over time, ensuring that process improvements do not compromise the ability to address potential security risks. 

On April 18, 2025, the U.S. Department of Justice (DOJ) announced the filing of a civil complaint against Barco Uniforms Inc., its executives Kenny and David Chan, and several affiliated companies. The complaint alleges violations of the False Claims Act (FCA) through a scheme to underpay customs duties on imported apparel. The case, originally filed under the FCA’s qui tam whistleblower provisions, was brought by a former Barco executive and is now being pursued by the government.

The DOJ contends that Barco and its affiliates engaged in a fraudulent scheme to undervalue imported garments from overseas suppliers, primarily in the People’s Republic of China. This was allegedly accomplished through a double-invoicing system, wherein false entry summaries were submitted to U.S. Customs and Border Protection (CBP), resulting in reduced duty payments. Notably, the government asserts that the defendants continued this practice even after a third-party auditor highlighted the risks associated with underpayment and recommended a review of duty calculations. The affiliated entities named in the complaint include Able Allied Limited, Nathan Global Direct Inc., J&K Garment Inc., Mega Goodwill Ltd., JS Garment Co., and Superway Import & Export Inc.

Under the FCA, knowingly submitting false claims or causing false claims to be submitted to the federal government is prohibited. Violations can result in treble damages and substantial penalties. The qui tam provisions allow private individuals to sue on behalf of the government and share in any recovery. In this case, the DOJ has intervened, indicating the seriousness of the allegations.

The action against Barco Uniforms reflects a broader and growing trend of heightened FCA enforcement in the customs arena. In recent years, the DOJ has increasingly targeted companies that misrepresent the value or origin of imported goods to reduce duty obligations, often focusing on schemes involving double invoicing, misclassification, and undervaluation. Importers should expect continued enforcement activity and ensure that their customs compliance programs are robust and up to date.

This case also underscores the critical importance of accurate customs declarations and compliance with trade laws. Businesses involved in importing goods should:

  1. Evaluate and enhance internal controls governing import and export compliance practices and rectify potential issues;
  2. Bolster mechanisms for responding to whistleblower concerns, as FCA investigations frequently stem from internal reports;
  3. Take proactive steps when third-party audits reveal compliance risks; and
  4. Educate staff involved in import and export operations about compliance requirements and the legal, financial, and reputational consequences of violations.