NEW YORK, Aug 13 (Reuters) – The U.S. Court of International Trade on Thursday ruled in favor of President Donald Trump’s 2025 decision to rescind a “de minimis” exemption for tariffs on some imports of less than $800, a rare win for the president in the trade court’s review of emergency economic powers.
Trump praised Thursday’s ruling as a “big win” in a Truth Social post, saying that the exemption had been “a giant loophole for tariff cheats.”
The court ruled that Trump had authority under the International Emergency Economic Powers Act to close the exemption for low-value imports from China, Mexico and Canada, which he did as part of a sweeping series of February 2025 executive orders that also imposed new tariffs on imports from those nations.
Those February 2025 tariffs were shot down by the U.S. Supreme Court earlier this year, but that ruling did not address Trump’s decision to rescind the “de minimis” tariff exemption for imports from China, Mexico and Canada.
Congress closed the “de minimis” exemption through its passage of the omnibus tax-and-spending bill in 2025, but the legislative action kept the exemption in place until July 2027.
An auto parts importer that had sued over the “de minimis” exemption, Michigan-based Detroit Axle, continued to press a legal challenge to tariffs that it paid on previously exempted goods. Detroit Axle argued that IEEPA did not give the president any independent authority to close the tariff exemption before the new law took effect.
A three-judge panel of the New York-based Court of International Trade ruled against Detroit Axle on Thursday, finding that IEEPA allowed the president to rescind a trade-related “privilege,” even if that law did not allow him to impose entirely new tariffs.
Detroit Axle had argued in court filings that it had adapted its business to take advantage of the “de minimis” exemption, opening a distribution center in Juarez, Mexico, to gather auto replacement parts and ship small orders directly to U.S. consumers.
Trump’s broad-brush tariff policies, which he has used as leverage in trade negotiations around the globe, have fared poorly in court so far.
The U.S. Supreme Court ruled against most of Trump’s widest-ranging tariffs on February 20, finding that the IEEPA does not authorize the president to unilaterally impose tariffs on trading partners, and the Court of International Trade later ruled against a new temporary tariff that Trump imposed to replace those duties. Trump has moved on to a third legal authority to impose tariffs on over 99% of imports, and those tariffs have also been challenged in court by U.S. states and small businesses.
(Reporting by Dietrich Knauth in New York; Editing by Matthew Lewis)
Comments