In early 2025, the Trump administration shook global markets by imposing sweeping new tariffs on imports from major U.S. trading partners — including China, Mexico, and even Canada. Framed as a response to national security threats, these tariffs ranged from 10% to as high as 50% on certain goods. But what raised eyebrows was not just the size or scope of these tariffs — it was the legal foundation used to justify them: the International Emergency Economic Powers Act (IEEPA). Traditionally a sanctions tool, IEEPA has never been wielded to impose broad tariffs across the global economy—until now.

Trump’s 2025 Tariffs: A National Emergency on Trade

The Trump administration issued a series of executive orders in 2025 that declared national emergencies related to border security, illegal drug trafficking, and persistent trade imbalances. These orders cited fentanyl crises, economic threats from foreign trade deficits, and unfair trade practices as extraordinary threats to U.S. national security.

In response, the administration imposed:

• A 25% tariff on most imports from Mexico and Canada (reduced to 10% for Canadian energy products),
• A 10% tariff on imports from China, and
• A “reciprocal” tariff regime imposing baseline 10% duties on all imports, with higher rates for nations seen as maintaining unfair trade barriers against the U.S.

The administration’s justification? These foreign threats demanded swift, unilateral action to protect American industries, secure the border, and restore trade “fairness.” For these reasons, the administration has leveraged the IEEPA.

IEEPA: From Sanctions Law to Tariff Tool

Enacted in 1977, the International Emergency Economic Powers Act grants the President broad authority to regulate economic transactions during a declared national emergency stemming from a foreign threat. Historically, IEEPA has been used to freeze assets, impose sanctions, and block specific imports from adversaries like Iran, North Korea, or Russia.

Tariffs have never before been issued under IEEPA.

The Trump administration has interpreted IEEPA’s authority to “regulate… the importation” of foreign goods as sufficient legal ground to impose tariffs. In essence, if imports from a foreign country contribute to an emergency (e.g., drug trafficking or economic harm), then placing tariffs on those imports falls squarely within the President’s IEEPA powers.

This interpretation offers an expedient way to bypass lengthy trade investigations under traditional statutes like Section 301 or Section 232. With IEEPA, the administration could move quickly—and broadly—to impose tariffs across entire categories of imports without waiting for Congressional approval or U.S. Trade Representative (USTR) findings.

The Legal Challenges: Stretching IEEPA to Its Limits?

This novel use of IEEPA has not gone unchallenged. Lawsuits from various industry groups, importers, and constitutional scholars have been filed in response to these new tariffs, raising a number of arguments:

1. There is no genuine “emergency” — Lawsuits argue that issues like trade deficits or long-term migration patterns, however serious, do not meet the definition of an emergency requiring extraordinary powers. One suit bluntly stated that the trade deficit emergency was “a figment of [the President’s] imagination: trade deficits, which have persisted for decades without causing economic harm, are not an emergency.” Courts may have to decide if the situations cited qualify as the “unusual and extraordinary” threats IEEPA demands.
2. IEEPA was never meant to authorize tariffs— Another legal contention is that IEEPA was never intended as a tariff tool. The law empowers regulation of imports during a crisis, but nowhere does it explicitly permit the President to levy import taxes. Plaintiffs argue that placing tariffs—which are essentially taxes—might exceed IEEPA’s scope. They point out that the Constitution gives Congress the power over tariffs and taxes, and Congress in passing IEEPA in 1977 did not clearly grant authority to rewrite tariff rates at will.

As these cases move through federal courts, early rulings will likely hinge on whether judges view the 2025 declarations as legitimate emergencies or as pretexts for trade policy maneuvers.

Conclusion

If upheld, Trump’s use of IEEPA to impose tariffs could set a new precedent: future presidents might leverage emergency powers to unilaterally adjust tariffs—sidestepping Congress entirely. If struck down, such a decision will reaffirm limits on executive trade authority and preserve the traditional role of Congress in shaping U.S. trade policy.

For businesses, the stakes are immediate. Tariffs are already impacting supply chains and pricing, with legal uncertainty clouding long-term planning. As the courts weigh these challenges, importers, exporters, and investors alike should stay attuned to how this interpretation of IEEPA could reshape the legal landscape of international trade.

Questions?

Please contact the authors Wei Wang , Aimee J. Jachym and/or Marcus C. Hoekstra or another member of our corporate international practice.