Supreme Court hearing on IEEPA tariffs: Many of us listened to the hearing and the USWTA (US Wine Trade Alliance) circulated an excellent summary which we have recapped here:
On November 5, the U.S. Supreme Court held a highly anticipated hearing this week on the legality of President Trump’s tariffs imposed under the International Emergency Economic Powers Act (IEEPA). The case could have sweeping implications for executive authority over trade policy.
The session, scheduled for 80 minutes but lasting more than two and a half hours, proved difficult for Solicitor General John Sauer, who represented the administration. Observers noted that he struggled to satisfy the Justices’ questions, while Neal Katyal, arguing for the private-sector plaintiffs, offered clear, well-prepared responses.
Reactions from the Bench:
- Justices Kagan, Sotomayor, and Jackson were openly skeptical of the government’s position.
- Justices Gorsuch and Barrett also posed challenging questions, signaling doubts about the administration’s interpretation of the statute.
- Chief Justice Roberts spoke sparingly but pushed back on key arguments.
- Justices Alito and Thomas appeared more sympathetic to the government’s case.
Core Issue:
The central question is whether the President’s statutory authority to “regulate” imports under IEEPA includes the power to impose tariffs. The decision is expected to be all-or-nothing—either affirming full presidential tariff authority under IEEPA or striking it down entirely.
Key Arguments Discussed:
- Congress has never elsewhere delegated tariff or tax authority through the word “regulate.”
- While prior rulings under Section 232 allowed presidential power to “adjust” imports via tariffs, that statute differs structurally from IEEPA.
- Some Justices questioned whether the power to embargo (clearly granted under IEEPA) logically includes the lesser power to tariff
- Others emphasized that taxation and tariff powers are constitutionally reserved for Congress, referencing the Framers’ intent and even the Boston Tea Party.
- When Congress enacted IEEPA in 1977, it aimed to limit executive authority, not expand it.
- The government countered that national security concerns justify broad presidential discretion and that the major questions doctrine should not apply.
- Several Justices warned that ruling for the President would permanently shift tariff authority to the executive branch, since Congress could not easily reclaim it.
Timeline and Outlook:
While the Court granted expedited review, a ruling could come anytime from late 2025 to early 2026. Most analysts expect the Court to uphold lower court rulings declaring the tariffs illegal.
Implications:
If the Court strikes down the tariffs, they could be lifted, and possibly refunded, but this would not eliminate tariffs altogether. It would simply require future administrations to follow established legal and procedural channels to impose them. A ruling against the President could bring a temporary tariff-free period, though new trade restrictions could resurface through other mechanisms.
USTRA China Ship Penalty fee pause: As mentioned last week, China and US agreed to a one year pause on the tariffs on vessels built or owned by companies from the other country. Under the deal, the US will lift the Section 301 tariffs on ships constructed in Chinese shipyards or owned by Chinese firms, such as OOCL and COSCO. In response, China will eliminate its tariffs on US-built or US-owned ships. The pause will take effect on November 10,2025 – November 9, 2026.
Government Shutdown continues: The USA government shutdown is now the longest in history, now in its 38th day. Today marks the start of a reduction in flights based on the directive from the Federal Aviation Administration (FAA) and Department of Transportation (DOT). The action requires airlines to reduce schedules across 40 USA airports during the government shutdown to reduce pressure on the aviation system and ensure safe operations. Long haul/international flights should not be affected but for anyone flying domestically in the USA, be aware of potential delays. TTB also remains shuttered with new label approvals and formulas at a standstill, along with payment of Craft Beverage Modernization Act (CBMA) claims.
Switzerland-USA trade negotiations: The administration is continuing to pursue new trade deals, including a potential agreement with Switzerland announced on November 5. Early reports note that the deal could reduce the 39% tariff imposed in August 2025 in exchange for increased Swiss investment in U.S. industries.
Europe/UK Port congestion: Reports from our overseas teams indicate easing congestion in Rotterdam and Antwerp but growing delays in the port of Southampton. Cargo from Scotland has been routed to Southampton due to unreliable barge service from Grangemouth plus a change with one of the ocean carriers moving to Southampton from Rotterdam as a transshipment hub has created a strain on the port facilities. Cargo moving via Southampton currently faces a 2–3-week backlog. The rail service from Scotland to Southampton is also congested but currently a better option than shipping out of Grangemouth. We will provide updates as the situation evolves.
LCL Services from France, Italy, and Spain: Bi-monthly departures continue from each of these countries for your small shipments, offering a per case rate from point of pick up to the Alba Wine and Spirits warehouse in Edison New Jersey. Shipments from other European countries can be added into the mix, with pick-ups offered in most European countries. Please let us know if you need any further information!
WBWE: Alison Leavitt, Managing Director of WSSA, will be presenting at the World Bulk Wine Exhibition in Amsterdam at 10am on November 25. The panel discussion which Alison will lead is entitled Minimize risk in shipping bulk: Understanding flexitank shipping in practical terms: This panel of experts will discuss the practical matters of bulk shipping including understanding flexibag construction and the technical aspects of proper fitting and fitting, as well as crisis management for bulging or leaking. Understanding the risk and rewards and the need to use experts in the field to ensure your shipments are properly handled and protected. Please reach out to us to set up a meeting at Stand C09
Mexico Corrugated Carton Boxes Estimated Prices Update: Our partners at Albatrans Mexico have shared the following: New Regulation on Estimated Prices for Corrugated Cardboard Boxes Effective July 2025, Mexico’s Ministry of Finance and Public Credit (SHCP) issued an update to the regulation that establishes estimated prices for certain imported goods, a mechanism designed to ensure accurate payment of customs duties and combat undervaluation practices in sensitive sectors. This year’s resolution, published on July 16th, 2025, in the Diario Oficial de la Federación, includes a new item under control: “corrugated carton boxes.”
Official publication – DOF, July 16th, 2025
Purpose of Estimated Prices and Customs Guarantee Accounts
- Prevent undervaluation and protect local industry.
- Ensure importers pay the correct amount of customs duties.
- Establish a guarantee mechanism when declared values fall below estimated prices.
How It Works:
- If the declared unit value > Estimated Price: No guarantee required (use identifier EX as per Annex 22).
- If the declared unit value < Estimated Price: Importers must establish a Customs Guarantee Account to cover the difference between duties calculated on the declared value and those based on the estimated price.
Note: Estimated prices do not determine tariffs or VAT, but they do affect the calculation of guarantee amounts.
Key Legal Basis:
Articles 86 and 86-A of the Mexican Customs Law (Ley Aduanera).
What Importers Should Do:
Importers of goods listed in the Estimated Prices Agreement (such as corrugated carton boxes) must verify their invoice values to determine whether they are required to open a Customs Guarantee Account.