Chinese automaker BYD is suing the U.S. government over tariffs, joining a host of other companies seeking refunds on levies they argue were imposed improperly.
The details: BYD, which doesn’t sell passenger cars in the U.S., is targeting duties paid on imported commercial vehicles, batteries, energy storage systems, and solar panels.
The lawsuit (spotted first by Chinese magazine Caijing) was filed in the U.S. Court of International Trade on January 26.
And it primarily challenges President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose the levies.
BYD’s legal action, which mirrors that of other companies, takes specific issue with the fact that “the text of IEEPA does not employ the word ‘tariff’ or any term of equivalent meaning.”
Why it matters: If the courts ultimately narrow or overturn the administration’s use of IEEPA, it could reshape pricing on everything from batteries and EV components to future imports.
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Between the lines: BYD’s suit lands as the broader legitimacy of Trump’s tariffs heads toward a much bigger test before the U.S. Supreme Court later this year.
The pending decision stems from challenges in lower federal courts brought by small businesses and a dozen states that also take direct aim at the President’s authority to impose tariffs under IEEPA.
The lower courts ruled that Trump lacked the legal authority to impose the so-called “reciprocal tariffs” on imports from many U.S. trading partners, and fentanyl tariffs on products from Canada, China, and Mexico.
A November report indicates that both conservative and liberal justices on the Supreme Court are skeptical about the legitimacy of the levies under IEEPA.
A recent poll by the Marquette Law School reveals that most Americans (63%) want the court to rule against Trump on the measures, even as the administration doubles down on its position.
What they’re saying: "President Trump has used his IEEPA [International Emergency Economic Powers Act] authority consistently throughout the year to negotiate better deals for the American people," Bessent said Sunday on "Sunday Morning Futures" (via Fox News). "It's an emergency authority, and what was an emergency if it wasn't the fentanyl crisis? We are seeing Canada, Mexico, [and] China come to the table to stop this scourge of the American people," he added.
Bottom line: With BYD’s case and a looming Supreme Court ruling, tariff rules could swing in either direction, either locking in higher landed costs or opening the door to cheaper components and potentially more foreign-brand competition.
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