CHPS Podcast Episode 7: After IEEPA – What’s Next for Tariffs?

In Episode 7 of CHPS of Insight, Chris White welcomes back Kelsey J. Christensen, a Member with Clark Hill's International Trade group, to discuss the Supreme Court’s decision striking down tariffs imposed under IEEPA.

The ruling removes the legal basis for the administration’s reciprocal tariffs and certain country-specific tariffs tied to the fentanyl emergency. Kelsey walks through what that means for companies that paid those duties, including why many importers may be entitled to refunds and how the customs liquidation timeline could affect recovery options. They also examine what tools remain available to the administration to reimpose tariffs and how new trade investigations could quickly reset the tariff environment for U.S. importers.

This podcast is intended for general informational purposes only and does not constitute legal or financial advice or a solicitation to provide legal services. The information in this podcast is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Listeners should not act upon this information without seeking professional legal counsel. The views and opinions expressed in the podcast represent those of the individual speaker only and are not necessarily the views of Clark Hill PLC.

Transcript

Hello everyone and welcome back to CHPS of Insight, where we bring policy to practice, offering our perspective on current policies and latest trends in the legal world and how they may affect your business.

This podcast is intended for general informational purposes only and does not constitute legal advice or a solicitation to provide legal services. The information in this podcast is not intended to create and receipt of it does not constitute a lawyer client relationship. Listeners should not act upon this information without seeking professional legal counsel.

The views and opinions expressed in the podcast represent those of the individual.

speaker only and are not necessarily the views of Clark Hill PLC. 

I am your host, Chris White, here for episode seven with Kelsey Christensen, a member in our International Trade group.

Hi everyone. Good to be here today. No surprise, we are talking about the Supreme Court's recent tariff decision. This is a highly anticipated decision about President Trump's use of a statute called IEEPA (I-E-E-P-A), and whether that statute allowed the president to impose tariffs.

Awesome. Thank you, Kelsey. Speaking of that, what, why don't you give us a quick background on what a EA is and then tie that into how President Trump had originally used it for for those tariffs.

Sure. So the, a EA statute is an emergency statute that does provide certain authorities to the president to regulate imports and exports into and from the United States.

The statute provides a list of certain authorities that it grants to the president, and it does not specifically say that it allows the president to impose tariffs.  Instead, the language that the Supreme Court was focusing on is whether the word regulate and importation was enough to give the president that tariff authority.

 Ultimately, the Supreme Court on Friday found that it was not enough to give the president tariff authority. And that tariff authority generally lies with Congress.

Got it. So what does that mean now to people who were paying tariffs under it prior to this decision?

Yeah, good question. So the first thing is what are the tariffs that people are paying?

Because there's a lot of different types, right? There's a lot of different types of tariffs and. These IEPA tariffs were really only one of various legal authorities. So the president and this administration have used other legal authorities to impose tariffs, and those tariffs are unaffected. IEPA tariffs were also talked about as reciprocal tariffs and.

We saw that in the form of this administration imposing a percentage tariff rate on imports from many different countries globally. The A EPA tariffs also were the authority used as the basis for, imports from Canada, Mexico, and China in relation to President Trump's emergency announcement about fentanyl and trafficking.

So under A EPA, there were two different buckets of tariffs. There were the reciprocal worldwide tariffs, and there were Canada, Mexico, China tariffs for the Fentanyl emergency. Those were the focuses of the court cases. But the President also used a EPA for a few other different types of tariffs like Brazil.

This case, knocked out all of the A EPA tariffs from the import analysis, but left other national security tariffs in place.

And so that's obviously a big change for many people, I'm sure. Does this go retroactive or does it just mean that going forward they can no longer seek payment by CPP as people are important?

Sure. So our interpretation is that this is retroactive, right? The court found that the statute does not allow the president to have that tariff authority. And so if that tariff, if that authority never existed, the collection of tariffs under that authority were not lawful. So companies should be eligible for refunds of their tariffs that they paid.

It's probably very happy news for for a lot of these people. We're trying to figure out how to how to keep their goods priced despite the tariffs coming in. Do we know a process right now for how to go about getting that refund or what that might look like?

The Supreme Court did not talk about and did not establish a refund process, but we are looking at a couple different options.

there's a distinction between something called liquidated entries and unliquidated entries. So I just wanna cover this briefly and then we'll get into the refunds from there. When. A company imports something into the United States. They have to file paperwork with customs, they also have to pay the tariffs that they anticipate being required for their entries.

Customs receives the paperwork and within typically about 300, 314 days. After the import came into the country, customs goes through this process where they finalize that entry, they review the paperwork, they review the tariff amounts that were paid, and they finalize all the calculations. And that process is called liquidation.

It happens again about 300 to 314 days after the product comes into the country. That's important for refunds to know if your product has liquidated or been finalized or not because it might impact how that company, how that importer goes about getting refunds. if an import was already finalized by customs, the appropriate remedy might require going to the courts, whereas there may be some administrative routes available to products that are not yet finalized by customs or as we call it in the trade world, that are still unliquidated.

Got it. And so obviously that's, that is something that people need to track carefully, especially if they have some that are in the mix there.

And I'm sure you'll all be watching it very carefully for for Windows when that exact guidance or procedure comes out so that people can know how to flag liquidate or unliquidated costs at that point. Absolutely. Yep. Perfect. And so I'm sure we'll hear you back on here once that once that pops up.

What's your forecast or what are your thoughts on if Trump's just gonna reimpose these tariffs in a different way? Can he do that? Is there a different mechanism he could use right now?

Yes, there is. The Supreme Court's decision really only looked at whether one particular statute allowed the president to impose tariffs. The Supreme Court was not looking at whether any other statutes allowed the president to impose tariffs. So we already have tariffs in place under different statutes.

One is called Section 2 32. It's a national security based tariff and it allows the administration to impose tariffs typically on a product or commodity basis. So we see this often with these national security 2 32 tariffs on aluminum, steel, other metals and on automotive parts, A among others.

But that's, those are common examples of these Section 2 32 tariffs. But very shortly after the Supreme Court's tariff decision on Friday, the Trump administration announced on social media, and I know that we'll see it through, or I expect that we'll see it on formal channels soon. Their intent to use something called Section 1 22.

Section 1 22 is different statute that allows the president to impose tariffs for up to 150 days. At that point, it would require an act of Congress to keep the tariffs in place. What I expect to happen in the meantime. And I believe the administration has indicated this in their public statements is we expect to see the administration open, other investigations into our trading partners.

So different countries under section 3 0 1, yet another tariff in legal authority. Section 3 0 1 is another authority that allows. US government to investigate whether a foreign country's trade practices are burdensome to trade. And if they are, if we find that other country's actions do burden trade it allows the US government to impose tariffs under that statute as well.

We've had section 3 0 1 tariffs in place against many imports from China for. A handful of years at this point. There is an active investigation into Section 3 0 1 imports from Brazil, and I expect that we will see many other investigations be opened under section 3 0 1 fairly soon.

Got it. No, I mean that, that's very good to know and I'm sure.

Like you and many others, people were just waiting to get some indication from the administration as to what they're gonna do and which route they may take from there. So do you have any teasers for things you're closely watching or thinking are gonna emerge here? Hopefully sometime in short order for for future analysis or provide some more clarity as to what people could expect.

Yeah, we're definitely keeping a close eye out for any formal guidance that customs releases, but we're also paying attention to how the administration as a whole navigates the trade deals that it has signed over the course of the past year. Whether it's was with, the uk, India, Bangladesh, and other countries. We're really looking to see how those trade deals may be affected by tariffs. it's something that's gonna require, getting into the weeds of what commitments were made in each of those trade deals. And then language and guidance that comes out to formalize this administration's plans for Section 1 22, tariffs among others.

Awesome. No, that makes sense. I ask you that obviously as a a good teaser because we'll obviously be hearing more from you as these things start to come out and to encourage people to, hey, to reach out to Kelsey with their questions and also to highlight things that are concerning people in the industry.

So we can get you back on here and talk more about this as a little bit more clarity emerges as the dust starts to settle from the 170 page opinion dropping not too long ago.

Yeah that's very true. I'm sure that, the tariff environment is going to keep evolving and evolving quickly.

So happy to talk anytime you'll have me, Chris.

Absolutely. I'm sure we'll get back on here too, to talk about the aspects of the descent and what that might indicate as to to other avenues that may be out there. Thank you so much again for your time and it's always great to have you on here, Kelsey.

Likewise. Anytime.