09/05/2025

Advisory Update: IEEPA Tariff Litigation – Current Status and Uncertainties

Check out this week's Customs Corner to read about the IEEPA tariff litigation, U.S.-Japan trade agreement, and more.

Trade and Customs Updates

1) Advisory Update: IEEPA Tariff Litigation – Current Status and Uncertainties 

Background 

The legality of tariffs imposed under the International Emergency Economic Powers Act (IEEPA) continues to be challenged in federal courts. In V.O.S. Selections, Inc. v. Trump, the U.S. Court of Appeals for the Federal Circuit ruled that the President lacked authority under IEEPA to impose tariffs aimed at addressing synthetic opioid trafficking and trade imbalances. The court found that IEEPA does not explicitly grant tariff authority, unlike other statutes such as Section 232 or Section 301. 

 

Key Update – September 3, 2025 

On September 3, President Trump formally requested an expedited review by the Supreme Court of the Federal Circuit’s decision invalidating the IEEPA tariffs. This move signals the administration’s intent to defend the use of IEEPA for tariff actions and seek reversal of the appellate court’s ruling during the Supreme Court’s upcoming October 2025 term. 

 

Current Status of Tariffs 

Despite the appellate court’s ruling, the IEEPA-based tariffs remain in effect due to a temporary stay issued by the Federal Circuit. This stay delays the enforcement of the decision and allows time for Supreme Court review. The Supreme Court is expected to decide whether to take up the case during its September 29 conference.  

 

Uncertainties for Importers 

There are significant unknowns regarding how CBP will handle entries subject to IEEPA tariffs: 

  • No CBP guidance has been issued on whether importers should: 
    • Request liquidation extensions, or 
    • File placeholder protests to preserve refund rights. 
  • If the Supreme Court upholds the invalidation, importers may be eligible for refunds, but: 
    • Unliquidated entries may require Post Summary Corrections (PSCs). 
    • Liquidated entries will likely require formal protests within 180 days of liquidation (per 19 CFR § 174.12). 
  • It is unclear whether CBP will establish a claims process or allow retroactive relief. 

Shape 

Recommended Actions 

  • Monitor all entries subject to IEEPA tariffs and maintain detailed records. 
  • Track liquidation dates and prepare to file protests within the statutory window. 
  • Consult legal counsel to evaluate whether to request liquidation extensions or file protective protests. 
  • Stay informed on court developments, especially the Supreme Court’s decision on whether to hear the case. 

 

Conclusion 

The IEEPA tariff litigation remains in flux. While recent rulings favor importers, the lack of CBP guidance and the pending Supreme Court review mean that importers must remain vigilant. Proactive steps to preserve refund rights are essential, even as the legal and regulatory landscape continues to evolve. 

 

2) United States and Japan Announce Trade Framework 

On September 4, 2025, President Trump announced a comprehensive framework agreement between the United States and Japan. Under the new agreement, the United States will implement a baseline 15 percent tariff on nearly all Japanese imports, with exceptions and special provisions for sectors such as automobiles, aerospace, pharmaceuticals, and certain natural resources not available in the United States. For Japanese products with an existing tariff below 15 percent, the total will be raised to 15 percent; for products already at or above 15 percent, no additional tariff will be added. 

 

The new tariff structure will apply retroactively to imports entered or withdrawn for consumption on or after August 7, 2025, and will replace previous ad valorem duties imposed under earlier executive orders.

 

The agreement provides for the removal of reciprocal and Section 232 tariffs on Japanese civil aircraft. The agreement also modifies automobile and auto parts tariffs to align with the new 15 percent baseline where applicable. Products such as generic pharmaceuticals and natural resources not available domestically may be exempted from these tariffs upon review by the Secretary of Commerce.

 

The Secretary of Commerce, in consultation with relevant agencies, is authorized to make necessary changes to the HTS and issue further regulations to implement the agreement. 

 

Ongoing monitoring will ensure Japan fulfills its commitments; with the possibility of further adjustments should Japan fall short.

 

Revised Reciprocal Duties on Japan:

Reciprocal Duty List

Japan: Goods with Column 1 Duty Rate >15%0% 
Japan: Goods with Column 1 Duty Rate <15%15% minus Column 1 Duty Rate Retroactive to 8/7/2025
Auto and Auto Parts with Column 1 Duty Rate >15% (Japan)0%Within 7 days of the date of publication in the FRN
Auto and Auto Parts with Column 1 Duty Rate <15% (Japan)15% minus Column 1 Duty RateWithin 7 days of the date of publication in the FRN
Aerospace (Japan)Reciprocal 0%
Section 232 0%		Within 7 days of the date of publication in the FRN
Japan natural resources, generic pharmaceuticalsWaiting further review 

 

Reference:

Implementing The United States–Japan Agreement – The White House

 

3) CBP Issues CTPAT Alert on Transshipment Risks Amid Rising Efforts to Evade Trade Enforcement

CTPAT has issued an Alert addressing the growing threat of transshipment being used to circumvent trade enforcement measures. The Customs Trade Partnership Against Terrorism (CTPAT) is a voluntary supply chain security program that recognizes members of the trade community who uphold exemplary security practices, maintain compliance with U.S. laws and regulations, and have no significant security-related incidents.

 

While transshipment—the transfer of goods between different modes of transportation or ports during their journey—is a legitimate and common practice in global logistics, CBP warns that it becomes illegal when exploited to evade duties, sanctions, or trade restrictions. The agency has observed a notable rise in such illicit transshipment activity, especially in industries facing high antidumping and countervailing duties (AD/CVD) and tariffs on Chinese-origin goods.

 

CBP reminds U.S. importers and exporters of their legal obligation under the Customs Modernization Act of 1993 to exercise reasonable care and ensure the accuracy of all information submitted in Customs transactions. This includes thoroughly reviewing all documents and declarations prepared or filed by agents, brokers, and third parties with CBP and other government agencies.

 

The agency urges all members of the trade community to remain vigilant, maintain robust compliance protocols, and regularly review supply chain activities to prevent inadvertent participation in unlawful transshipment schemes.

 

Reference:

CTPAT Alert - Illegal Transhipping - July 16, 2025

 

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