In a landmark decision, the U.S. Court of Appeals for the Federal Circuit has issued a permanent injunction blocking key portions of former President Trump’s tariff program—potentially reshaping U.S. trade policy. The Trump administration has already filed an appeal, setting the stage for a legal showdown that may ultimately reach the Supreme Court.

The ruling stems from the case V.O.S. Selections, Inc. v. Trump (Docket No. 2025-1812), which challenges the legal foundation for tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The court sided with the plaintiffs and ordered a 10-day window for administrative action to enforce the injunction—suggesting a near-term freeze on many of the tariffs.

Major Tariff Halt Ordered

The court’s decision halts:

• 30% tariffs on goods from China

• 25% tariffs on select imports from Mexico and Canada

• 10% blanket tariffs on most other foreign imports

However, tariffs enacted under Section 232 of the Trade Expansion Act, such as the 25% duties on autos, steel, aluminum, and auto parts—remain in place.

This ruling threatens to unravel large parts of Trump’s tariff strategy before many new trade agreements have been finalized.

Legal and Economic Impact

The appeal, filed by multiple federal agencies including the Executive Office of the President and U.S. Customs and Border Protection, follows an earlier ruling by the U.S. Court of International Trade.

If upheld, the injunction could trigger major disruption across international supply chains. Importers who paid elevated duties may seek refunds, while many businesses are expected to reconfigure sourcing and pricing strategies amid legal uncertainty.

Trade experts warn that the case may redefine the scope of presidential power to impose tariffs without congressional authorization, potentially setting a new precedent.

Industry Reaction

“This injunction introduces a level of unpredictability we haven’t seen in years,” said one logistics executive. “But it also offers a potential reprieve for companies that have struggled with cost inflation since 2018.”

Industries likely to benefit include retail, automotive parts, and electronics—sectors that have borne the brunt of past tariffs.

What Comes Next

While the Trump administration is appealing the ruling, unless a higher court grants a stay, the injunction will take effect in just 10 days. That leaves businesses operating under the current tariff regime with a narrow window to act.

This case represents a pivotal test of executive authority in trade and may redefine how tariffs are applied going forward.

Legal Update – May 29, 2025:

Following the decision, the U.S. Court of Appeals has granted an immediate administrative stay, temporarily blocking enforcement of the injunction while it reviews the case.

• Plaintiffs’ response to the government’s motion is due by June 5, 2025

• The government’s reply must be filed by June 9, 2025

In effect, the tariffs imposed under IEEPA remain in place for now, pending further court action. Most observers expect this matter to head to the U.S. Supreme Court, which would have the final word on the legality of these tariffs.