Trade court clears Trump gut of tariff exemptions on low-price goods

The ruling marks a win for President Trump who has been blocked by the courts several times as he has tried to implement his tariff policies without legislation from Congress.(CN) — The U.S. Court of International Trade sided with President Donald Trump on Thursday, finding he had the authority to end a tariff exemption on goods valued under $800.The lawsuit brought by plaintiff Detroit Axle, an auto parts retailer and distributor, asked the court to overturn Trump’s rescission of the exemption on cheaper imported goods.The so-called “de minimis” exemption, enacted in 1938 and subsequently updated by Congress, allowed imports of goods under $800 to enter the U.S. duty-free.In 2025, Trump took several steps to curb the exemption, specifically targeting China and then later suspending the exemption for all countries in an executive order.However, in its unanimous ruling, the three-judge panel found the ending of the exemption fell within Trump’s authority under the International Emergency Economic Powers Act, also known as the IEEPA.“Instead, by rescinding the de minimis exemption, the president found the existence of an underlying condition — the national emergency — and executed the policy of Congress by taking an action specifically enumerated in IEEPA purportedly to deal with that emergency,” wrote the panel in its per curiam ruling.The Trump administration claimed in a related executive order that the import exemption was being used to smuggle illegal drugs into the country and used the IEEPA as a legal basis for ending the rule and for enacting other tariffs.Effects of ending of the exemption have been felt by retailers such as Shein, an online clothing retailer founded in China and now headquartered in Singapore, which said it lost $99 million last quarter due to the loss of the exemption and the levying of a 3-euro fee by the European Union.Trump’s use of the IEEPA, a Nixon-era law, to impose tariffs was untested legal ground, having previously been used by presidents to impose sanctions or to restrict assets of terrorist organizations.In fact, in February the U.S. Supreme Court rebuked Trump’s broad worldwide tariffs, finding the IEEPA did not give him the power to issue such wide-reaching tariffs.However, in its ruling regarding the de minimis exemption, the trade court found a distinction while not challenging the Supreme Court’s ruling.“The president’s rescission of the de minimis exemption is not tantamount to the imposition of tariffs because suspending the de minimis exemption imposes no new duties; it merely renders goods valued at $800 or less subject to the same duties that would apply to those goods if they were valued at more than $800,” the panel wrote.The panel did not assess the validity of Trump’s claimed emergency.The panel consisted of Judge Timothy Reif, a Trump appointee, Judge Gary Katzmann, a Barack Obama appointee and Judge Jane Restani, a Ronald Reagan appointee.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads