NJ Bill Broadly Banning Non-Competes + No-Poach Agreements Would Impact Employers Immediately
Takeaways
S4385/A5708 would ban non-compete agreements, no poach agreements, and any clause that restrains anyone from engaging in a lawful profession or trade entered into before and after its effective date.
This bill would not apply to non-compete clauses between employers and senior executives if the employer pays the senior executive’s full salary and the restricted period is no longer than 12 months.
The bill would not apply to causes of action related to non-compete clauses that accrued before its effective date or non-compete clauses entered into by an employer pursuant to a bona fide sale of a business.
The New Jersey Legislature is considering a bill (S4385/A5708) banning non-compete clauses, with limited exceptions, and prohibiting no-poach agreements between employers and workers.
Appearing to take a page from the now set-aside Federal Trade Commission final rule, S4385/A5708 would broadly prohibit employers from requiring, enforcing, or attempting to enforce a non-compete clause against any worker who is not a senior executive. The bill defines a “senior executive” as a worker in a “policy-making position” with an annual salary not less than $151,164.
The bill as currently drafted would apply to all non-compete agreements entered before and after its effective date. It would require employers to notify workers subject to existing non-competes within 30 days of its effective date that any such agreements are no longer legally enforceable.
The bill also declares no-poach agreements contrary to public policy and void.
Requirements for Senior Executives
The bill bans non-compete clauses between employers and senior executives unless they meet the following criteria, including but not limited to:
The employer provides disclosure of the terms of the non-compete clause within 30 business days of the effective date, including the requirements of this bill and any revisions required for compliance with this bill.
The non-compete clause is no broader than necessary to protect the employer’s legitimate business interests.
The non-compete clause does not limit the senior executive for a period exceeding 12 months following termination.
The non-compete clause is limited to the geographical areas where the senior executive provided services or had a material presence.
The non-compete clause is limited to services provided during the last two years of employment.
The bill does not apply to non-compete clauses entered into by an employer pursuant to a bona fide sale of a business or if a cause of action related to a non-compete clause accrued before the bill’s effective date.
Penalties
Any worker subject to a non-compete clause or no-poach agreement in violation of the law may bring a civil action against the employer, and the court has jurisdiction to void the agreement and order appropriate relief, including but not limited to liquidated damages and reasonable attorney’s fees.
Finally, the Department of Labor and Workforce Development could impose penalties up to $1,000 on employers for failing to provide the required notice.
Next Steps
The bill will take immediate effect once passed and signed into law. Employers in New Jersey that require employees to sign non-compete and non-poach agreements should keep an eye on developments as significant changes to employers’ practices will be required if this bill becomes law. Jackson Lewis attorneys can assist with any aspect of compliance and answer questions regarding the legislation’s provisions or applicability.
Protecting Sponsors from Emerging Portfolio Company Risks through Insurance
In addition to the normal operational and legal risks associated with owning and managing portfolio companies, 2025 has introduced or exacerbated a wave of geopolitical and macroeconomic risks such as inflation, tariffs, trade, depressed consumer sentiment, political risks, and credit risks. The resulting, increased risks faced by portfolio companies has caused a need for private equity sponsors to focus more closely on the insurance maintained at the portfolio company level, and not only the sponsor’s own policies. It is critical for sponsors to work closely with management of their portfolio companies, insurance brokers, and experienced coverage counsel to review and negotiate strong insurance for their portfolio companies. Savvy sponsors are able to utilize their leverage to negotiate bespoke, manuscript policy forms that can be used across their portfolio to provide consistent, strong protection for each of the sponsor’s portfolio companies.
Legal risks at the portfolio company level can impact sponsors not only by harming the value of their investment but also by leading to direct claims being brought against individuals the sponsor appointed to the portfolio company’s board and against the sponsor itself. These risks are particularly acute during times of economic distress or uncertainty, where creditors and other constituents commonly bring claims for breaches of fiduciary duty against directors and aiding and abetting claims against the appointing sponsor.
Coverage disputes in this scenario are both more likely and more difficult when strong coverage under both sets of policies – the sponsor’s own policy and the portfolio company’s policy – has not been negotiated and attention has not previously been given to ensuring that the two sets of policies work together. For example, careful attention needs to be given to policy provisions addressing whether and how a policy applies when an individual serves in multiple capacities and is sued in both capacities (e.g., as an employee of a sponsor and a board member of a portfolio company) and in what order multiple, potentially implicated policies (e.g., the sponsor’s policy and the portfolio company’s policy) apply. Additionally, particularly careful attention needs to be given to the renewal of insurance policies for portfolio companies experiencing financial distress, as insurers often use those circumstances as a basis for adding exclusions and provisions that can significantly limit coverage, such as exclusions that bar coverage when the company becomes insolvent, exclusions for claims brought by creditors, and other problematic provisions. Careful review, negotiation, and coordination of the language and structure of portfolio company policies and private fund‑level policies can help mitigate the risks arising from portfolio companies to sponsors and their associated individuals.
One promising development we have seen in the last year is that more sponsors (but still a distinct minority) have begun to negotiate strong, manuscript policies for all of their portfolio companies. Historically, the quality of coverage provided under directors and officers (“D&O”) policies issued to portfolio companies has been poor – and that continues to be true of the majority of portfolio company policies – but as more sponsors begin focusing on the quality of their portfolio companies’ policies, that should change.
Relatedly, we have also seen an increased focus on protecting individuals against the legal and regulatory risks they face from serving as directors of portfolio companies. This increased focus on individual protection has included an increased emphasis on obtaining dedicated insurance limits for individuals when the company is unable to provide indemnification (called “Side A” policies”) at the portfolio company‑level and to negotiate enhancements to such policies. It is critically important to ensure that sponsor policies and portfolio company policies respond seamlessly and in a prearranged coordinated fashion in these claims.
Of course, the types of litigation and regulatory risks covered by D&O policies are far from the only risks faced by portfolio companies and that can impact sponsors. For example, the increased frequency and severity of data breaches, ransom demands, and social engineering theft has made protection against cyber risks through strong cyber insurance policies critical for portfolio companies and their sponsors. The market for cyber insurance has hardened in the past several years, however – with increased premium costs and additional limitations on coverage – due to cyber insurers having paid out more and larger claims than they had anticipated for cyber events. The more challenging market has made it even more important for careful analysis and review of potential insurance coverage, particularly because it is rare for all cyber risks of concern to be covered under the same policy. Instead, it is common for cyber “crime” risks (for example, social engineering and fraudulent transfers) to be covered under a crime policy or endorsement to a fidelity bond, with other cyber risks (for example, data breaches and business interruption from cyber events) to be covered under a separate cyber policy. Coordinating these separate coverages is important to ensure that as broad a spectrum of cyber risks as possible are covered.
As the risks facing sponsors and their portfolio companies continues to evolve, the insurance they purchase must likewise evolve to match those risks. It is imperative that sponsors and their portfolio companies work with sophisticated insurance brokers and experienced coverage counsel to ensure that their portfolio companies obtain strong coverage. Sponsors also should enhance their leverage to negotiate manuscript policies that can be used by all of their portfolio companies (rather than placing coverage piecemeal) with additional enhancements added as needed – to help protect the sponsor’s investment and their individuals from the developing risks faced by their portfolio companies. This approach also will provide enhanced commercial leverage and legal protection to resolve claims more expeditiously and efficiently for greater amounts of coverage in order to manage emerging complex risks more effectively.
Additional Authors: Joshua M. Newville, Todd J. Ohlms, Robert Pommer, Seetha Ramachandran, Nathan Schuur, Jonathan M. Weiss, William D. Dalsen, Adam L. Deming, Adam Farbiarz & Hena M. Vora
Can There be Only One? The CFTC Faces an Unprecedented Moment with Potentially One Commissioner
As commissioners continue to depart, the Commodity Futures Trading Commission (CFTC or Commission) may soon find itself in an unprecedented situation – operating with only one sitting commissioner. While the Commission has weathered periods with as few as two commissioners, a one-member Commission would mark uncharted territory. Yet, under the Commodity Exchange Act (CEA), the CFTC may continue to function and make decisions, even with a single member.
A Wave of Departures Leaves the CFTC at a Crossroads
The CFTC is in the midst of a broad leadership turnover. Chairman Rostin Behnam departed earlier this year following the presidential transition. Since then, three additional commissioners have announced their exits: Summer Mersinger has stepped down to lead the Blockchain Association, Christy Goldsmith Romero left the Commission at the end of May, and Kristin Johnson has signaled her intention to depart by year’s end. Meanwhile, Acting Chairman Caroline Pham has indicated she plans to leave the agency once Brian Quintenz is confirmed as Chairman. If these timelines hold, Mr. Quintenz could be the sole commissioner overseeing the CFTC, at least temporarily.
What the Law Allows: One Commissioner Can Act
While this potential scenario is unusual, it is not unworkable. Section 2(a)(3) of the CEA provides that “a vacancy in the Commission shall not impair the right of the remaining Commissioners to exercise all the powers of the Commission.”[1] Unlike the Securities and Exchange Commission (SEC), which has codified quorum requirements under Rule 200.41 (generally requiring three members for official action), the CFTC has no equivalent provision.[2] There is no regulatory minimum for quorum at the CFTC. As a result, one seated commissioner retains the full Commission’s authority to advance rulemakings and oversee all Commission activities.
Why it Matters: Governance, Rulemaking, and Oversight
The Commission’s responsibilities extend beyond rule proposals and enforcement actions. Each commissioner plays a role in shaping regulatory priorities, proposing new rules, overseeing market divisions, engaging with market participants, and working with advisory committees. A single-member CFTC would retain legal authority but might arguably face practical constraints in preserving deliberative rigor and balancing industry input.
Key functions that could be impacted include:
Rulemakings and Settlements: Even with just one vote, the Commission could proceed with notices of proposed rulemaking, adopt final rules, and approve enforcement settlements or exemptive orders.
Strategic Agenda-Setting: The sole commissioner would have discretion to outline policy priorities, propose rulemaking timetables, and shape enforcement strategy.
Division Oversight and Delegation: While core functions could be delegated to staff, ultimate oversight and direction would rest with the remaining commissioner.
Looking Ahead: Quintenz’s Potential Vision for the CFTC
Former Commissioner Brian Quintenz has been nominated by President Donald Trump to return, this time as Chairman. Once confirmed by the Senate, he is expected to bring a pro-innovation, risk-focused approach to CFTC oversight. During his prior tenure, Mr. Quintenz was a strong advocate for regulatory clarity in digital assets and emerging markets. His likely priorities include: supporting responsible innovation, including around digital assets and event contracts; managing systemic risk through targeted, data-informed policies; and enhancing cross-agency coordination with domestic and international regulators.
For more about Mr. Quintenz’s potential agenda, see this Katten post.
Conclusion
Recent announcements by the current Commission make the likelihood of a one-person Commission quite plausible for this upcoming fall. Notwithstanding this unprecedented situation, under its governing statute, the Commission would still be able to continue operating as designed.
Footnotes
[1] 7 U.S.C. § 2(a)(3).
[2] 17 C.F.R. § 200.41.
The Tariff Roller Coaster: US Court of International Trade Invalidates Tariffs Imposed Under IEEPA, Only to Be Stayed by the Federal Circuit Court of Appeals
What Happened
On May 28, 2025, the US Court of International Trade (“CIT”) issued a major decision in V.O.S. Selections, Inc. v. United States invalidating two sweeping tariff programs imposed under the International Emergency Economic Powers Act (“IEEPA”) earlier this year. The decision strikes down the legal basis for key executive orders imposing tariffs on China, Canada, Mexico and dozens of other trading partners, reshaping the legal framework for future emergency-based trade actions. The court granted summary judgment in favor of both private-sector plaintiffs and a coalition of state governments, concluding that the tariff actions exceeded statutory authority under IEEPA and intruded upon Congress’s exclusive constitutional role in regulating trade.
However, less than 24 hours later, the Federal Circuit Court of Appeals issued an order administratively staying the CIT injunction while it considered an appeal on the case. Thus, notwithstanding the CIT order, the IEEPA tariffs remain in effect.
Background
IEEPA is a federal law that grants the President broad powers to regulate international commerce after declaring a national emergency in response to an unusual and extraordinary threat to the national security, foreign policy or economy of the United States. Typically, IEEPA has been used to impose sanctions on foreign states or individuals, control assets or restrict financial transactions in response to specific foreign threats. IEEPA’s authority traditionally has not been used to impose broad tariffs simply based on general economic concerns.
Since taking office in January 2025, President Trump has implemented a series of tariffs under IEEPA rather than by using traditional trade enforcement statutes such as Section 301 or Section 232 of the Trade Expansion Act of 1962.
These IEEPA tariffs include:
Trafficking tariffs: A 25 percent ad valorem duty on goods from Mexico and Canada and a 20 percent duty on goods from China, justified on grounds of transnational criminal threats and border security (see previous alert here).
Worldwide and retaliatory tariffs: A 10 percent baseline duty on all imports, with increased rates up to 50 percent for certain US trading partners, based on allegations of non-reciprocal trade policies and structural global imbalances (see previous alerts here and here).
Both types of tariffs were implemented via executive orders invoking national emergency declarations under IEEPA.
Key Legal Holdings
The CIT ruled that:
IEEPA does not authorize boundless tariff authority. The court narrowly interpreted IEEPA’s grant of power to “regulate . . . importation,” holding that it does not encompass the imposition of broad, discretionary tariffs absent a defined emergency directly tied to foreign threats.
The tariffs were ultra vires. The court found that the President’s actions exceeded the legal authority granted by Congress under IEEPA, effectively encroaching upon powers specifically reserved for Congress under Article I of the US Constitution to regulate trade.
IEEPA requires a foreign emergency nexus. The court concluded that generalized economic concerns—such as trade deficits, wage suppression abroad or retaliatory trade practices—do not meet IEEPA’s strict requirement of an “unusual and extraordinary threat” arising, outside the United States. This holding significantly narrows the executive’s discretion in declaring emergencies for trade purposes, emphasizing that the threat must be directly tied to foreign actions impacting national security or foreign policy, not merely economic competition.
Private and state plaintiffs had standing. The court recognized downstream economic harm (e.g., increased procurement costs, disrupted supply chains) as sufficient to establish standing, even for non-importers.
Impact and Effective Scope of the Ruling
The CIT’s judgment is nationwide in scope and normally would be immediately effective. Because the CIT invalidated the relevant executive orders and related Harmonized Tariff Schedule of the United States (HTSUS) modifications, the ruling would have had the practical effect of nullifying the challenged tariffs as a matter of law. However, the Federal Circuit’s administrative stay of the CIT injunction means that:
The tariffs remain in effect for now, pending further action by the appellate court.
The administrative stay is temporary and does not decide the appeal itself, but it preserves the status quo while the court considers the government’s full motion for a stay pending appeal.
Plaintiffs must respond to the government’s stay motion by June 5, 2025, with a reply due June 9, 2025.
Parties have been instructed to notify the Federal Circuit of any ruling on the parallel stay motion still pending before the CIT.
Unless and until the Federal Circuit denies the government’s stay request or the CIT separately lifts the stay, businesses should treat the tariffs as still in force.
Importantly, neither the CIT nor the Federal Circuit order affect product-specific tariffs imposed under other authorities, such as Section 232 of the Trade Expansion Act of 1962. Tariffs on imports of aluminum, steel and certain automotive goods remain in force and are unaffected by these rulings.
Issues Potentially to Be Raised on Appeal
The government is widely expected to appeal the CIT’s decision to the Federal Circuit. Key legal questions likely to be raised on appeal include:
Scope of IEEPA authority: Whether the phrase “regulate . . . importation” authorizes tariff actions, particularly considering precedent under the Trading with the Enemy Act. The government is likely to argue that “regulate . . . importation” within IEEPA is a broad grant of power that includes the imposition of tariffs, citing historical precedent under the Trading with the Enemy Act (e.g., United States v. Yoshida Int’l, Inc., 526 F.2d 560 (C.C.P.A. 1975)) to support a more expansive view of presidential authority during emergencies.
Use of constitutional avoidance: Whether the CIT erred by interpreting IEEPA narrowly based on the nondelegation and major questions doctrines, rather than on plain statutory text.
Justiciability of emergency declarations: Whether the judiciary may review the President’s determination that a national emergency exists for IEEPA purposes. The government may contend that the President’s determination of a national emergency for IEEPA purposes is a political question and thus generally not subject to judicial review, arguing that the CIT overstepped its bounds in scrutinizing this executive determination.
APA applicability: Whether the CIT improperly imported Administrative Procedure Act (APA) standards in reviewing executive action not subject to the APA.
Standing of non-importers: Whether downstream purchasers without direct duty liability can challenge tariff actions under 28 U.S.C. § 1581(i).
The Federal Circuit’s treatment of these issues could have long-term effects on the balance of power between Congress and the executive branch in trade law and emergency economic policy.
Next Steps for Businesses
Businesses affected by the invalidated tariffs should:
Monitor for further court action, including whether the CIT grants or denies the pending stay motion, and any orders from the Federal Circuit on the full stay request.
Adjust forward-looking import planning to reflect the possibility of the tariffs being rolled back if the stay is lifted or the appeal is denied.
Monitor CBP implementation guidance. Companies should pay close attention to forthcoming communications from US Customs and Border Protection (CBP), particularly via Cargo Systems Messaging Service (CSMS) announcements, which are typically published on the CBP website. CBP has used CSMS in the past to communicate implementation steps in response to major litigation.
Importers should proactively review their Automated Commercial Environment (ACE) accounts and coordinate closely with their customs brokers to identify affected entries, assess potential refund claims and remain responsive to any agency developments or requests for information.
Court of International Trade Sets Aside Presidential IEEPA Tariffs and Federal Circuit Postpones Nationwide Injunction
A three-judge panel of the United States Court of International Trade (“CIT”) issued a landmark decision on May 28, 2025, in V.O.S. Selections, Inc. v. United States,[1] concluding that tariffs imposed by the President under the International Emergency Economic Powers Act (“IEEPA”) exceeded the President’s statutory authority. The court vacated the challenged tariff orders and permanently enjoined their operation nationwide. However, the U.S. Court of Appeals for the Federal Circuit less than twenty-four hours later temporarily stayed the lower court’s order, pending a decision on a more permanent stay until all appeals conclude. Accordingly, the President’s tariffs are presently preserved, as the lower court’s decision has been stayed. A second decision by the D.C. District Court, a different federal court, also held the President’s IEEPA tariffs are beyond the scope of the statute and imposed a more limited injunction for two parties.[2]
These rulings do not affect other tariff measures taken by the Trump Administration, such as section 232 duties against steel and aluminum, and automobiles.
Background
Since January 2025, the President has declared several national emergencies and imposed a range of tariffs on imports from its trading partners. These included:
Worldwide and retaliatory tariffs consisting of a rate of 10 percent on all imports from all U.S. trading partners, with higher rates for certain countries, as a response to persistent U.S. trade deficits and alleged unfair trade practices.
Country-specific tariffs consisting of a 25 percent duty on Canadian and Mexican products (10 percent on Canadian oil and potash) and a 20 percent duty on Chinese products. These were implemented to address declared threats “to the safety and security of Americans, including the public health crisis of deaths due to the use of fentanyl and other illicit drugs” from international cartels, drug trafficking, and related criminal activity.
Multiple states and businesses challenged these tariffs, arguing that the President had exceeded his authority granted by IEEPA and that the actions violated important constitutional principles.
Key Legal Findings
The CIT held that IEEPA does not grant the President unlimited tariff authority. While the statute allows the President to “regulate . . . importation” in response to an “unusual and extraordinary threat” following a declared national emergency, the court held that this language does not authorize the imposition of unbounded tariffs. The court emphasized that any delegation of tariff authority to the President must be clearly limited and guided by an “intelligible principle” to avoid violating the separation of powers. The court also explained that the current tariffs are distinguishable from prior, more limited uses of emergency powers, noting that the challenged tariffs lacked meaningful limitations in scope or duration, effectively entailing unlimited Presidential authority.
The court held that the worldwide and retaliatory tariffs were unbounded by any limitation in duration or scope and, accordingly, ultra vires and contrary to law.
It also held that the country-specific tariffs failed to comply with IEEPA because the statute requires that emergency powers be exercised only to “deal with an unusual and extraordinary threat” and there is no direct connection between the tariffs and the stated threat. Rather, the tariffs were used as leverage in negotiating a solution, which the statute does not contemplate.
The D.C. District Court found that IEEPA does not support the President’s tariffs, and the implementing agency violated the Administrative Procedure Act, but declined to reach arguments specific to the President’s tariffs and IEEPA. It remains to be seen which court will ultimately have jurisdiction, as both have held that they do.
Pending Relief
Though the CIT vacated the President’s tariff orders and permanently enjoined their enforcement nationwide, the Federal Circuit’s administrative stay, pending resolution of the government’s motion to stay pending appeal, postpones the lower courts actions. The tariffs, accordingly, remain in effect for the moment. If implemented, the CIT’s decision would have far-reaching consequences for anyone dealing with merchandise exported into the United States. Practically speaking:
All tariffs imposed under the challenged executive orders would be set aside, and importers would no longer be subject to the additional duties previously in effect under these orders.
The decision indicates that the President’s authority to impose tariffs under IEEPA is not open-ended and must be exercised within clear statutory and constitutional boundaries.
The decision also signals that future attempts to use IEEPA to impose broad tariffs—especially in response to trade deficits or as general leverage—will likely face significant judicial scrutiny.
Next Steps and Key Takeaways
In addition to the Federal Circuit’s quick action to administratively stay the CIT’s order, the government has already appealed the CIT’s decision. Given the fluidity of the current situation, importers and affected parties should monitor developments closely and consult with counsel regarding the status of the ongoing litigation and any duties paid under the relevant tariffs and potential refund procedures. It is also important to recognize that IEEPA is not the sole mechanism available to the Trump Administration for imposing tariffs. Tariffs implemented on steel, aluminum, autos, and potentially future products under “Section 232” investigations are not covered by this decision.
Despite the superior court’s stay, the lower courts’ decisions mark a significant statement of congressional control over tariff policy and, until the appellate courts decide, a limitation on the use of IEEPA to regulate importation.
[1] https://www.cit.uscourts.gov/sites/cit/files/25-66.pdf
[2] https://www.courthousenews.com/wp-content/uploads/2025/05/contreras-blocks-certain-trump-tariffs.pdf
Syria-ous Changes for Middle East Business? The United States, UK, and Europe Relax Sanctions on Syria
In a significant shift in international policy, the United States, European Union, and United Kingdom have each taken steps to ease sanctions on Syria, aiming to support the country’s reconstruction and political transition following the fall of the Assad regime.
United States Actions
On May 23, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License No. 25 (GL 25), authorizing certain transactions otherwise prohibited under the Syrian Sanctions Regulations (31 C.F.R. Part 542). That move represents a major policy shift aimed at facilitating reconstruction and humanitarian efforts in Syria.[1] In parallel, the U.S. Department of State issued a waiver of sanctions under the Caesar Syria Civilian Protection Act. Together, those developments signal a coordinated effort to promote economic stabilization while maintaining leverage over the Syrian government’s conduct.
Scope of Authorized Transactions
GL 25 authorizes U.S. persons to engage in a broad range of transactions involving Syria that were previously prohibited. Specifically, the license allows transactions that involve the Government of Syria and certain blocked persons, including individuals and entities named in the annex to GL 25, as well as entities that are owned 50 percent or more by such persons. The license covers services, investment, and dealings involving Syrian-origin petroleum and petroleum products, among other activities. Notably, this license lifts longstanding restrictions on financial transactions and investment, which could enable U.S. companies to reenter the Syrian market under certain conditions.
Concurrently Issued Measures
The easing of OFAC sanctions is part of a wider package of measures. In coordination with GL 25, the U.S. Department of State issued a 180-day waiver of certain sanctions under the Caesar Act, providing additional relief intended to stimulate activity in key sectors such as infrastructure, agriculture, and healthcare.
The Financial Crimes Enforcement Network (FinCEN) issued guidance relaxing restrictions under Section 311 of the USA PATRIOT Act, allowing U.S. financial institutions to maintain correspondent accounts for the Commercial Bank of Syria. These measures are designed to operate in tandem and provide meaningful openings for financial and commercial reengagement, subject to oversight and compliance measures.
Limitations and Conditions
Despite the breadth of the new authorizations, the relief measures are not unconditional. The U.S. government has emphasized that continued implementation of GL 25 and related actions will depend on the Syrian government’s conduct going forward. Specifically, the U.S. has tied future sanctions relief to Syria’s demonstrated commitment to protecting ethnic and religious minorities and ceasing support to designated terrorist organizations. The U.S. intends to monitor these commitments closely, and the status of GL 25 may be revisited if conditions on the ground deteriorate or if the Syrian government fails to uphold its obligations.
Export Control Considerations
Importantly, while GL 25 eases certain economic sanctions, it does not affect the application of U.S. export control restrictions over the country. Items subject to the Export Administration Regulations (EAR) generally remain prohibited for export or reexport to Syria, unless specifically authorized by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS). This includes both items classified under specific Export Control Classification Numbers (ECCNs) and those designated as EAR99. Likewise, exports of U.S. Munitions List items and related defense services remain subject to the International Traffic in Arms Regulations (ITAR), administered by the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC). Companies considering transactions involving Syria should therefore make sure that they obtain appropriate licenses from those agencies before exporting to Syria.
European Union Measures
On May 28, 2025, the Council of the European Union adopted a series of legal acts lifting all economic restrictive measures on Syria, with the exception of those based on security grounds.[2] This move formalizes the political decision announced on May 20, 2025, and aims to support the Syrian people in rebuilding a new, inclusive, pluralistic, and peaceful Syria.[3] As part of this approach, the Council removed 24 entities from the EU list of those subject to the freezing of funds and economic resources, including banks such as the Central Bank of Syria and companies operating in key sectors for Syria’s economic recovery. However, the EU has extended the listings of individuals and entities linked to the Assad regime until June 1, 2026, and introduced new restrictive measures under the EU Global Human Rights Sanctions Regime, targeting individuals and entities responsible for serious human rights abuses.
United Kingdom Developments
On April 24, 2025, the UK government published the Syria (Sanctions) (EU Exit) (Amendment) Regulations 2025,[4] which took effect on April 25, 2025. These regulations partially suspend a number of significant sanctions that have been in place for over a decade, reflecting developments in the political situation in Syria following the fall of the Assad regime in December 2024. The UK has lifted sanctions on several Syrian government agencies, including the Ministry of the Interior, the Ministry of Defense, and the General Intelligence Service, as well as the police, air force, military, and state-run media. Additionally, the UK has pledged up to £160 million in support for Syria in 2025, providing lifesaving assistance and supporting agriculture, livelihoods, and education programs to help Syrians rebuild their lives. The United Kingdom is expected to adopt additional legal measures to ease Syrian sanctions, mirroring recent actions by the U.S. and EU.
Implications for U.S. and International Businesses
These coordinated actions by the U.S., EU, and UK signal a new phase in international engagement with Syria, potentially opening avenues for businesses and investors. However, companies considering entry into the Syrian market would be well advised to exercise caution and conduct thorough due diligence to ensure compliance with the remaining sanctions and export control laws. Despite the easing of certain sanctions, stringent export control restrictions remain in place, and the relief measures are contingent upon the Syrian government’s commitment to safeguarding human rights and not providing safe harbor to terrorist organizations.
FOOTNOTES
[1] See OFAC’s press release available here.
[2] See Council’s Press Release, available here.
[3] See Council’s Press Release, available here.
[4] Available here.
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US Provides Broad Sanctions Relief to Syria
On 23 May 2025, the United States provided broad sanctions relief to Syria and the new Government of Syria under President Ahmed al-Sharaa. While speaking at an investment forum in Riyadh, President Trump announced his intentions to lift sanctions on Syria, stating that sanctions relief will “give them a chance at greatness.”
To that end, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License (GL) 25, authorizing transactions prohibited by the Syrian Sanctions Regulations (SySR), as well as transactions prohibited under certain other statutes and executive orders. Alongside GL 25, the US Department of State issued a 180-day waiver of mandatory “Caesar Act” sanctions to permit certain investments in Syria and the Financial Crimes Enforcement Network permitted US banks to maintain correspondent accounts for the Commercial Bank of Syria.
Between 2004 and 2011, the United States imposed increasingly comprehensive sanctions on Syria, prohibiting most US investment in Syria, the export of goods and services to Syria, dealings in Syrian petroleum, and transactions involving Syrian blocked parties, including “secondary sanctions” for significant dealings with the blocked Government of Syria.
Under GL 25, US persons are authorized to engage in many transactions prohibited under the SySR, including:
Transactions with 28 Syrian parties on the Specially Designated Nationals and Blocked Persons List (SDN List), including certain financial institutions, ports, oil and gas companies, airlines, and ministries. These parties are named in the Annex to GL 25. Authorization to deal with these named parties extends to the blocked entities they own at least 50% or more (collectively “Annex Parties”).
Certain transactions in Syria, provided they do not involve blocked parties that are not Annex Parties, including: new investment in Syria, the export of services to Syria, US importation and other dealings in Syrian petroleum, dealings in the property and property interests of Annex Parties, and payment transfers involving such authorized activities.
It is important to note that GL 25 does not authorize:
Transactions involving blocked parties not specifically authorized under GL 25.
Unblocking any property blocked as of 22 May 2025.
Exports, reexports, and transfers to or within Syria that require authorization under the Export Administration Regulations or International Traffic in Arms Regulations. Accordingly, the export, reexport, or transfer of defense articles and dual-use items, software, and technology remain prohibited unless authorized.
Transactions involving the Governments of Russia, Iran, or North Korea.
Sanctions relief under GL 25 became effective on 23 May 2025 and is not subject to an expiration date. OFAC can revoke GL 25 at any time or replace it with a “GL 25A” requiring the “wind down” of existing transactions by a certain date. The Treasury Department has signaled that additional sanctions relief may be forthcoming, referring to GL 25 as a “first step.”
EU Lifts Key Sanctions on Syria: Legal and Compliance Implications Amid Evolving Opportunities
Earlier this week, the Council of the EU adopted a series of legal instruments giving effect to what had been agreed on 20 May 2025, to significantly reduce sanctions on the Syrian Arab Republic. As a result, all EU economic restrictive measures targeting Syria have been lifted, except for those maintained on specific security-related grounds. This marks a substantial shift in the EU’s sanctions posture, intended to facilitate renewed economic engagement, support post-war reconstruction and encourage institutional re-integration, while preserving targeted measures where legal and strategic considerations continue to apply.
As part of this move, 24 entities have been removed from the EU’s list of designated persons and entities subject to asset freezes (vid. Annex II, EU Regulation Nº36/2012). These include financial institutions such as the Central Bank of Syria and commercial actors operating in strategic sectors for the country’s recovery, such as oil production and refining, cotton, telecommunications and media. The council characterises this lifting of sanctions as a principled response to a moment of historic transition, and a reaffirmation of the EU’s longstanding partnership with the Syrian people.
Read the full insight here.
Court Strikes Down Fentanyl and Reciprocal Tariffs, but Appeals Court Temporarily Stays Impact
Key Takeaways
The U.S. Court of International Trade struck down President Trump’s fentanyl and reciprocal tariffs imposed under the International Emergency Economic Powers Act of 1977 (IEEPA), ruling the statute did not authorize such broad actions.
The court’s order halts future tariff collection, requires refunds of duties collected since February 2025, and has nationwide impact across all U.S. importers and ports.
The government has appealed the decision and requested a stay of the court’s order, which the Federal Circuit granted. This temporary stay pauses the unwinding of the tariffs, resulting in continued tariff collection in the interim and delayed refunds to importers.
The ruling is limited to IEEPA-based tariffs and does not affect existing or future tariffs imposed under Section 232 or Section 301 authorities.
On May 28, 2025, the U.S. Court of International Trade (USCIT) struck down the earliest and broadest of President Trump’s second term tariff actions: the tariffs imposed against Canada, Mexico and China starting in February and March (the fentanyl tariffs) and the tariffs imposed against nearly all other countries in early April (the reciprocal tariffs). These actions, together as subsequently modified, subjected most U.S. imports to additional import duties of between 10% and 25%. The court’s order wipes those executive tariff impositions off the table, eliminating prior and prospective collection, including the planned increase of the 10% reciprocal tariffs later this summer. If the opinion and order stand, all fentanyl and reciprocal duties collected since February 2025 will be refunded. The court’s order does not impact tariffs imposed under other tariff authorities like Section 232 or Section 301.
The court’s opinion, issued on May 28, impacts multiple tariff executive orders issued by the President invoking the IEEPA. The court specifically found that that statute did not authorize the President “to impose unlimited tariffs on goods from nearly every country in the world.”
On February 1, President Trump first invoked IEEPA to announce tariffs imposed on U.S. imports from Canada, China and Mexico intended to address the flow of fentanyl and its precursors from those countries crossing the U.S. border; the actions against Canada and Mexico were also intended to address migration flows from those two countries. The tariffs, set to take effect on February 4, were ultimately deferred with regard to Canada and Mexico until early March. Since that time, these tariffs have been revised on several occasions, for example, exempting U.S. imports eligible for preferential treatment under the U.S.-Mexico-Canada Agreement (USMCA) from the fentanyl tariffs.
Later, on April 2, President Trump announced 10% tariffs on the vast majority of imports from the vast majority of countries, effective April 5; these tariffs were intended to rebalance U.S. trade flows and achieve “reciprocal” trading treatment. For certain countries, those 10% tariffs briefly increased to higher country-specific rates at 12:01 am ET on April 9, 2025. That same date, however, President Trump paused the increase in reciprocal duty tariff rates for those countries with enhanced rates above 10% for all countries other thanChina, with the higher rates deferred for 90 days (to July 8, 2025). With regard to shipments from China, President Trump announced escalating tariff rates peaking at 125%. The 125% tariffs were subsequently temporarily decreased to 10%, effective May 16, 2025, following productive negotiations between the U.S. and China; higher rates previously in effect are expected to be reimposed effective August 12.
The court’s action from May 28 eliminates the entire IEEPA tariff framework, ordering U.S. Customs and Border Protection to refund the fentanyl and reciprocal tariffs collected and cease collection of new duties. This order has national effect, thereby impacting across all U.S. importers and ports.
Although the court invalidates the tariffs and orders that the tariffs be unwound within 10 calendar days of its opinion’s issuance, the government has already appealed the court’s ruling to the U.S. Court of Appeals for the Federal Circuit and has sought a stay of the court’s order pending resolution of the appeal, which the Federal Circuit granted. This temporary stay pauses the unwinding of the tariffs, resulting in continued tariff collection in the interim and delayed refunds to importers. Whichever party prevails on appeal before the Federal Circuit will have an opportunity to seek further review by the U.S. Supreme Court.
The USCIT’s judgment is limited to the IEEPA-based tariff regimes and does not impact tariffs imposed under other legal mechanisms, for example, tariffs imposed to date or potentially imposed in the future on certain sectors under national security investigations conducted under Section 232 of the Trade Expansion Act of 1962 (such as on steel, aluminum or autos) or under Section 301 of the Trade Act of 1974 (as imposed by President Trump during his first term against certain imports from China and expanded during the Biden Administration). This opinion also does not impact future potential Section 232 actions, such as those that may be taken for pharmaceuticals, critical minerals, semiconductors and heavy trucks following the outcome of those investigations.
Foley Automotive Update- May 29, 2025
Trump Administration Trade and Tariff Policies
Foley & Lardner provided an overview for multinational companies regarding the most common False Claims Act risks that may arise from improper management of import operations.
A May 28 ruling from the U.S. Court of International Trade suspended a significant portion of the Trump administration’s tariffs, after the panel determined the executive branch had wrongfully invoked an emergency law to justify the levies. The Trump administration has requested a stay and appealed the ruling.
The Department of Commerce on May 20 issued the “procedures for submission of documentation related to automobile tariffs,” for automobile importers to comply with the process of identifying the amount of U.S. content in each model imported into the United States. The agency stated there were roughly 200 repeat importers of subject automobiles in 2024. The notice indicated there are 13 OEMs with automobile operations in Canada and Mexico, with production spanning 54 vehicle model lines.
The Commerce Department on May 20 announced preliminary determinations that active anode material produced in China is unfairly subsidized by the Chinese government, which could lead to anti-subsidy duties on imports. The agency expects to issue final determinations in countervailing duty (CVD) investigations later this year. Active anode material is a key component in lithium-ion batteries.
China began issuing a limited number of export licenses for certain rare earth magnets, following weeks of uncertainty after the nation imposed trade restrictions over certain rare earth minerals and magnets in early April. The magnets are essential for a range of auto components.
Section 232 tariffs will not help the United States diversify its sources of critical minerals and reduce its reliance on China, according to a recent letter from the National Association of Manufacturers to the Commerce Department. The NAM suggested policymakers should instead pursue permitting reforms, secure favorable trade and investment terms with international allies, and enact strategic incentives to enhance domestic production. China mines roughly 70% of the world’s rare earths, and the nation has a 90% share for the processing of rare earths mined worldwide.
President Trump on May 25 stated the U.S. will delay implementation of a 50% tariff on goods from the European Union from June 1 until July 9, 2025.
Automotive Key Developments
In a May 29 Society of Automotive Analysts Coffee Break webinar, Ann Marie Uetz of Foley & Lardner and Steven Wybo of Riveron provided an overview of the mounting risk of EV programs and the resulting key takeaways for automotive suppliers.
Crain’s Detroit provided an update regarding the status of several ongoing legal disputes between Stellantis and certain suppliers.
MEMA survey data found three-quarters of automotive suppliers expect worse financial performances in 2025 than previously anticipated. In addition, more than half of the trade group’s members are concerned about sub-tier supplier financial distress resulting from higher tariff-related costs, as well as the potential for North American production volumes to fall as low as 13.9 million to 14.3 million this year.
U.S. new light-vehicles sales are projected to reach a SAAR of 15.6 million units in May, according to a joint forecast from J.D. Power and GlobalData. The analysis estimates “approximately 149,000 extra vehicles were sold” in March and April ahead of the expectation for higher prices due to tariffs, and the “re-timed sales will present a headwind to the industry sales pace for the balance of this year.”
The National Highway Traffic Safety Administration submitted its interpretive rule, “Resetting the Corporate Average Fuel Economy Program,” to the White House for review. The Environmental Protection Agency is pursuing parallel vehicle emissions rules.
The U.S. Senate on May 22 approved three House-passed Congressional Review Act resolutions to revoke EPA-granted waivers that allowed California to impose vehicle emissions standards that were stricter than federal regulations.
The “big, beautiful” tax and budget bill passed by the U.S. House on May 22 would terminate several tax credits for EVs after December 31, 2025, including commercial EVs under Section 45W, consumer credits of up to $7,500 for new EVs under Section 30D and up to $4,000 in consumer credits for used EVs under Section 25E, as well as a credit for charging infrastructure under Section 30C. The bill also included a measure to establish annual registration fees of $250 for electric vehicles and $100 for hybrid vehicles to supplement the Highway Trust Fund.
Companies that collect and store personal data will soon have to comply with a Department of Justice rule that restricts sharing bulk sensitive personal data with persons from China, Russia, Iran, and other countries identified as foreign adversaries. The Data Security Program implemented by the National Security Division (NSD) under Executive Order 14117 took effect April 8, 2025. However, the DOJ will not prioritize enforcement actions between April 8 and July 8, 2025 if a company is “engaging in good faith efforts” towards compliance.
While President Trump expressed approval for a “planned partnership” between Nippon Steel and U.S. Steel, questions remain about the timeline for the proposed $14 billion merger first announced in December 2023. The deal may involve a so-called “golden share,” allowing the U.S. federal government to weigh in on certain company decisions, according to unconfirmed reports.
The University of Michigan predicted U.S. vehicle prices could rise 13.2% on average, or by $6,200 per vehicle, due to tariffs and retaliatory trade policies.
OEMs/Suppliers
Plante Moran’s annual North American Automotive OEM – Supplier Working Relations Index® (WRI®) Study found supplier relationships improved with Toyota, Honda and GM, and declined with Nissan, Ford and Stellantis compared to last year’s study. Toyota gained 18 points for its highest WRI score since 2007, while Stellantis dropped 11 points and remains in last place.
Stellantis named Antonio Filosa as CEO, effective June 23. Filosa currently serves as chief operating officer for the Americas and chief quality officer.
GM will invest $888 million to produce next-generation V-8 engines at its Tonawanda Propulsion plant near Buffalo, NY, representing the largest single investment the automaker has ever made in an engine plant. The automaker canceled a $300 million investment to retool the plant to manufacture EV drive units.
Toyota will revise its supply chain process to provide 52-week forecasts using cloud-based forecasting tools.
Bosch has a goal for North America to represent 20% of its global sales by 2030.
Toyota is reported to be considering a compact pickup truck for the U.S. market to compete with the Ford Maverick and Hyundai Santa Cruz.
Market Trends and Regulatory
Ford will recall over one million vehicles in the U.S. due to a software error that may cause the rearview camera image to delay, freeze, or not display.
Installations of industrial robots in the automotive industry in 2024 rose 11% year-over-year to 13,700 units, and roughly 40% of all new industrial robot installations in 2024 were in automotive, according to preliminary analysis from the International Federation of Robotics. Deployments of automation technologies and robotics are expected to increase at U.S. factories in response to high tariffs and trade uncertainty.
Seventy-six percent of respondents in Kerrigan Advisors’ 2025 OEM Survey believe Chinese carmakers eventually will enter the U.S. market, and 70% are concerned about the impact of Chinese brands’ rising global market share.
New orders for heavy-duty trucks in North America fell 48% year-over-year in April to levels not seen since the onset of the Covid pandemic, according to ACT Research.
Autonomous Technologies and Vehicle Software
The Wall Street Journal provided an exclusive report on allegations that now-defunct San Diego-headquartered autonomous truck developer TuSimple shared sensitive data with various partners in China. The former CEO of TuSimple recently founded Houston-based self-driving truck developer Bot Auto.
Amazon’s Zoox plans to expand testing of its autonomous driving technology in Atlanta. Waymo offers driverless rides in Atlanta in partnership with Uber, and Lyft plans to roll out ride-hail services in the area with May Mobility later this year.
Reuters reports a project between Stellantis and Amazon to develop SmartCockpit in-car software is “winding down” without achieving its goals.
The New York Times provided an assessment of the regulatory and market risks that may complicate the rollout of driverless semi trucks in the U.S.
Swedish driverless truck startup Einride is considering a U.S. IPO.
Electric Vehicles and Low-Emissions Technology
Honda reduced its planned all-electric vehicle investments by over $20 billion as part of an electrification strategy realignment that will target 2.2 million hybrid-electric vehicle (HEV) sales by 2030.
Stellantis will delay production of its 2026 base-model electric Dodge Charger Daytona at its plant in Ontario due to uncertainty over market demand and the impact of tariffs.
Cox Automotive estimated inventory levels for new EVs reached a 99 days’ supply industrywide in April 2025, representing a YOY decline of 20% due to efforts by automakers to adjust production in response to consumer demand. The average transaction price (ATP) for a new EV was $59,255 in April, up 3.7% compared to April 2024.
Nissan is considering a deal to procure EV batteries in the U.S. from a joint venture between Ford and South Korea’s SK On, according to unnamed sources in Bloomberg and The Wall Street Journal.
Chinese EV maker BYD plans to establish a European hub in Hungary, with 2,000 jobs to support vehicle sales, after-sales service, testing and development.
Federal Court Strikes Down IEEPA Tariffs
On May 28, 2025, a three-judge panel of the U.S. Court of International Trade (CIT) unanimously struck down the extensive tariffs imposed by President Trump under the International Emergency Economic Powers Act (IEEPA). The CIT held that the imposition of the tariffs exceeded the authority granted to the President by Congress under IEEPA. The Court issued a permanent injunction blocking the administration from enforcing the IEEPA tariffs, and ordered the administration to issue the necessary administrative orders within 10 days to end them.
The affected tariffs are the 10% tariff on goods of most countries (referred to by the Court as the Worldwide and Retaliatory Tariffs), the 25% border tariffs on goods of Canada and Mexico in response to the illicit drug trade, and the 20% tariff on goods of China (together referred to by the Court as the Trafficking Tariffs). The affected Executive Orders (EOs) are as follows: 14257,[i] 14259,[ii] 14266,[iii] and 14298.[iv]
The government has appealed the case to the U.S. Court of Appeals for the Federal Circuit.
The CIT’s Ruling
In its opinion, the CIT emphasized that the U.S. Constitution expressly assigns the power to impose tariffs to Congress under Article I, Section 8, Clause 1, and that any grant of authority by Congress to the president to impose tariffs must be construed narrowly.
The Court held that IEEPA does not allow the Executive Branch to unilaterally impose tariffs without clear and bounded statutory authority. Instead, the Court read IEEPA as imposing two key limits on the tariffs:
Section 1702 of IEEPA, which permits the President to “regulate . . . importation,” must be construed narrowly. The Court examined the legislative history of this provision, which replaced a very broad grant of authority under the older Trading with the Enemy Act with a much narrower authority. The Court thus held that IEEPA does not authorize broad, unbounded tariffs like the Worldwide and Retaliatory Tariff Orders. The absence of “any identifiable limits” rendered these measures beyond the scope of the statute. Rather, the CIT determined that the Worldwide and Retaliatory Tariffs, which were imposed in response to the trade deficit, must conform within the limits of Section 122 of the Trade Act of 1974, the statutory authority that deals with remedies for balance-of payments deficits.
Section 1701(b) of IEEPA limits the President’s authority to actions that “deal with an unusual and extraordinary threat” and prohibits the use of IEEPA “for any other purpose.” The Trafficking Tariffs were implemented to encourage foreign countries to arrest or detain bad actors responsible for the flow of illicit drugs into the United States. The Court determined that the Trafficking Tariffs failed to satisfy the statutory threshold, because the tariffs do not bear a sufficient connection to the alleged threat to constitute “dealing with” the identified threat.
What’s Next
The CIT’s judgment permanently enjoined the IEEPA tariffs and ordered that within 10 days necessary administrative orders be issued to effectuate the permanent injunction.
The U.S. Department of Justice (DOJ) immediately appealed the ruling to the Federal Circuit Court of Appeals. The DOJ also submitted to the CIT a motion to stay enforcement of the judgment pending appeal. If the CIT grants the stay, the IEEPA tariffs would remain in place during the appeal.
If the CIT does not grant the stay, the DOJ will likely seek to stay the CIT’s permanent injunction in its appeal.
Importers should also note that the Trump Administration’s tariffs imposed under different statutory authorities (such as the duties on steel, aluminum, automobiles, and automobile parts issued pursuant to Section 232 of the Trade Expansion Act of 1962 and the duties on certain Chinese goods issued pursuant to Section 301 of the Trade Act of 1974) are not affected by the CIT’s ruling, and remain in effect.
We also note that even if its appeal is unsuccessful and the CIT’s order terminating the IEEPA tariffs is upheld, nothing stops the Trump Administration from pursuing more tariffs under Sections 122, 232, 301, or 338 of other relevant trade acts. We will continue to keep an eye on developments and keep you informed here.
FOOTNOTES
[i] 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 (Apr. 2, 2025).
[ii] Executive Order 14259, Amendment to Reciprocal Tariffs and Updated Duties as Applied to Low-Value Imports From the People’s Republic of China, 90 Fed. Reg. 15509 (Apr. 8, 2025).
[iii] Executive Order 14266, 90 Fed. Reg. at 15626 (raising China-specific duty rate from 84 to 125 percent effective April 10).
[iv] Executive Order 14298, Modifying Reciprocal Tariff Rates To Reflect Discussions With the People’s Republic of China, 90 Fed. Reg. 21831 (May 12, 2025).
Matthew Floyd contributed to this article
Federal Court Halts Broad Swath of Tariffs, Ruling Trump Lacks Authority Under IEEPA
On May 28, 2025 the little-known federal Court of International Trade issued its ruling in two challenges — one brought by 12 states attorneys general and one by private companies — to President Trump’s authority to issue tariffs using the International Emergency Economic Powers Act (IEEPA).
No prior president has used IEEPA to support tariffs, as IEEPA has historically been viewed as only a sanctions authority. In a unanimous per curiam opinion, the three-judge panel of the court invalidated using IEEPA to support tariffs under Article I, Section 8, clauses 1 and 3 of the Constitution, which assign to Congress “the exclusive powers to ‘lay and collect Taxes, Duties, Imposts, and Excises’ and to ‘regulate Commerce with foreign Nations.’”
After an extensive review of Congress’ delegation of trade authorities dating back to 1916, the court quotes IEEPA’s provision that its “authorities ‘may only be exercised to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared… and may not be exercised for any other purpose.’” The court held that IEEPA does not delegate Congress’ power to the President “in the form of authority to impose unlimited tariffs on goods from nearly every country in the world.”
Concluding that IEEPA does not authorize any of the “Worldwide, Retaliatory, or Trafficking Tariff Orders,” the court found that narrowly tailored relief was inappropriate as “if the challenged Tariff Orders are unlawful as to Plaintiffs they are unlawful as to all.”
As a result, the challenged orders were permanently enjoined nationwide, allowing 10 calendar days for orders to be issued. The Trump Administration immediately filed for a motion to stay and appealed the order to the Court of Appeals for the Federal Circuit. The ruling halts the collection of the duties that were based on IEEPA under Executive Orders 14193, 14194, 14195 (the “Trafficking Tariffs”), and 14257 (the “Worldwide and Retaliatory Tariffs”) and all their amendments.
The “Trafficking Tariffs” are those imposed on Canada, Mexico, and China and the “Worldwide and Retaliatory Tariffs” are the global 10% ad valorem and the “reciprocal” global tariff schedule. It also reinstates de minimis treatment for shipments valued at less than $800. The ruling may also require refunding tariffs already paid.
Tariffs based on other authorities, including Section 232 tariffs on automobiles, aluminum, and steel, and Section 301 tariffs on China, remain in effect.
The ruling will likely throw a wrench into ongoing trade negotiations with dozens of countries, even while it is under appeal. In addition to the substantive ruling on IEEPA authority, both the nationwide injunction and the request for a stay pending appeal could make their way swiftly to the Supreme Court’s so-called “shadow docket” for emergency relief.
In addition, Congress may seek to ratify the tariffs, or the administration may seek to reinstate the tariffs using other delegated authorities. The ruling is unlikely to bring an end to the volatility that has surrounded the tariffs since they were imposed in April, and long-term planning around tariffs will continue to be challenging.