Lack of Injunctive Relief, Tariff Uncertainty Explain Dearth of Tariff Challenges, Attorneys Say

So far, Trump has expanded Section 232 steel and aluminum duties and imposed tariffs on China, Canada and Mexico under the International Emergency Economic Powers Act (IEEPA), while announcing new tariff actions on imported cars, light trucks and cargo vans (see 2503260077) and on all goods from any country that imports Venezuelan oil (see 2503240062). So far, these actions have gone unchallenged in the judiciary.

One reason for the dearth of challenges is the difficulty in obtaining injunctive relief against any duties imposed by the president. Lawrence Friedman, partner at Barnes Richardson, said attorneys are "contemplating theories to challenge IEEPA duties" but the "legal hurdles are high."

Obtaining an injunction requires showing a likelihood of success on the merits and irreparable harm suffered by the duties. An attorney for importers told us that both will be difficult to show. The president has very broad authority under the authorities he's using, including IEEPA and Section 232, imposing "very few limitations on the president's authority," the attorney said. "Once an emergency has been declared, it’s pretty broad, and so it’s difficult to find an angle ... where a judge would be able to put some parameters around that."

With regard to irreparable harm, the court has found that merely paying additional duties won't be enough to get injunctive relief, Friedman said. The attorney for importers added that it will take more time to establish greater harm, including serious harm to a business' viability or ability to operate in the U.S.

Ultimately, there's a two-year statute of limitations period that runs from the initial imposition of the duties, and attorneys are in "no major rush" to file before that time elapses, Friedman said. A similar situation followed the Section 301 duties imposed on China in Trump's first administration, with the major lawsuit challenging those duties not arriving until just days before the statute of limitations would have run out.

Until such time as attorneys are ready to launch such a major challenge, the focus of lawyers has primarily been geared toward short-term challenges centered on tariff mitigation strategies in response to the tariffs currently in place and the deluge of duties yet to come, said John Peterson, partner at Neville Peterson. "For example, I've spent a lot of time the last couple of weeks teaching Mexican growers and fruit and vegetable importers (whose stuff is NAFTA-originating and typically duty free) how to start declaring 'deductive value' and getting on Customs' reconciliation program," he said.

Friedman added that the unpredictable way in which the tariffs have been put in place, evidenced by the imposition of the IEEPA tariffs on Canada and Mexico for three days, then subsequent one-month delay, has made a legal challenge difficult. "It is hard to hit a moving target," he said. "The possibility of further agreements to exclude products or countries make it hard to know at what point it makes the most sense to file." When to file a suit will ultimately vary among companies, Friedman said, with some willing to weather the duties and see what happens in the long term.

The attorney for importers said that an added difficulty in filing a suit is an inability to achieve the exact relief sought by individual clients. Some importers may ultimately favor additional tariffs on some products but not on others or may only want to bring back other provisions, such as the de minimis threshold on goods from China or duty drawback. "You can't challenge one aspect of the remedy without saying the president didn't have discretionary authority to act in the first place," the attorney said.

Yet another potential factor affecting the status of litigation is potential retaliation the administration may enact on plaintiffs or the firms that represent them. So far, Trump has attempted to retaliate against firms Paul Weiss and Jenner & Block, among others, for their work either aiding his political opponents or prosecuting him. As a result, some firms may think twice before launching a case against any new tariff action.

"I would be very afraid if I had challenged his favorite pet toy," said another attorney, who represents exporters and importers. The attorney added that nobody wants to be the first to challenge the duties, noting the administration's success in chilling parties' assertion of their rights for fear of retaliation. The attorney also questioned how willing a large firm will be to stick its neck out for its trade practice, which often only employs a few attorneys.

Peterson also said there "may be some big law firms unwilling to bring the case because they fear retaliation from Trump," though he said ultimately the "big challenges will be brought."