On March 14, 2025, Secretary of State Marco Rubio issued a memorandum in the Federal Register that all agency actions involving trade, specifically “the transfer of goods, services, data, technology, and other items across the borders of the United States” are “foreign affairs functions,” and thus are exempt from the Administrative Procedure Act (APA).
Enacted in 1946, the APA governs how federal agencies can issue regulations. The APA establishes specific procedures, such as a public comment period, that federal agencies must follow when they engage in administrative action, such as issuing new rules and regulations, adjudication of licenses, or interpretation of existing regulations. In addition, the APA provides standards for judicial review of an agency action, enabling courts to strike down actions if they find that their substance or procedural history fails to meet APA standards.
However, the APA excludes certain agency functions from its procedural requirements and judicial standards, including actions involving “military or foreign affairs functions” under Title 5, Sections 553(a)(1) and 554 (a)(4) of the U.S. Code. In short, the Rubio memorandum is an effort to protect most of President Trump’s actions on trade, illegal immigration, export controls, artificial intelligence, and espionage from procedural requirements and judicial review by pulling these under the umbrella of the “foreign affairs” exception.
Doing so would insulate the administration from having trade-related agency actions struck down in the courts because of “process fouls”—procedural errors in conducting an agency action. For example, agency actions involving trade would no longer be exposed to potential “arbitrary and capricious” claims under Title 5, Section 706, of the U.S. Code, which allow courts to strike down agency actions that are arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. In other words, agency actions can be struck down when they are so far-fetched that they appear to lack any reasonable basis, do not consider relevant factors, or demonstrate a clear error of judgment. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971). These agency actions would still remain subject to tests of constitutionality or compliance with applicable laws.
The first Trump administration frequently ran into process fouls, and so far, the new administration gives every sign of having the same problem. In its first two months, the administration has already run into a burst of unfavorable court rulings.
Given the administration’s focus on implementing new trade actions with respect to China, Mexico, Canada, and others, it is unsurprising that it would take steps to shield these actions from judicial challenges. Still, the Rubio memorandum raises the question of whether existing trade laws are, in fact, subject to the APA, and, if so, whether the secretary’s memo will make any difference. The short answer is that some trade laws are subject to the APA, and some are not. It is not clear whether the memo would force any significant changes.
Q1: Which trade actions are subject to the APA, and which are not?
A1: The distinguishing question for whether a trade action is subject to the APA is whether the statute authorizing the action requires a presidential decision, in which case action taken under such statute is not subject to the APA, or an agency decision, in which case action taken under such statute is subject to the APA. The Supreme Court held in Franklin v. Massachusetts, 505 U.S. 788 (1992) that presidential actions are not reviewable under the APA, as the president is not specifically included in the APA’s defined scope of what constitutes an “agency action.”
Because the International Emergency Economic Powers Act (IEEPA), which the administration called on to impose recent across-the-board tariffs on China, Mexico, and Canada, requires a presidential decision, action taken under the statute is generally not subject to the APA. IEEPA actions nevertheless can be challenged in the courts as violations of due process under the Constitution or as actions beyond the president’s authority, as in Dames & Moore v. Regan, 453 U.S. 654 (1981).
Section 232 of the Trade Expansion Act of 1962, which the president has relied on to impose tariffs in both administrations, also involves a final decision by the president after a report and investigation by the Department of Commerce and is thus also exempt from the APA. While Section 232(b)(2)(iii) of this statute authorizes the Department of Commerce to hold hearings and seek public comments, it does not require these procedural steps. Instead, doing so is discretionary: The Department of Commerce can, “if it is appropriate and after reasonable notice, hold public hearings or otherwise afford interested parties an opportunity to present information and advice relevant to such investigation.” Because these procedural steps are not mandatory, and in the end, the final decision on any action rests with the president, Section 232 actions can only be challenged on Constitutional and other statutory grounds and not under the APA.
The other statute that the first Trump administration used frequently was Section 301 of the Trade Act of 1974, which it used as the basis for a series of tariff actions on China. Unlike actions taken under IEEPA and Section 232, actions taken under Section 301 are subject to the APA because the statute grants ultimate authority to the U.S. Trade Representative (USTR), albeit subject to the direction of the president. Accordingly, USTR Lighthizer’s decisions in 2018 and 2019 to impose 25 percent and 7.5 percent tariffs on various Chinese products were challenged under the Administrative Procedure Act in the U.S. Court of International Trade (CIT). The court found that USTR’s Section 301 decisions are covered by the APA, rejecting the U.S. government’s claims that Section 301 decisions are non-reviewable because they are presidential actions. The court also found that Section 301 decisions are not covered by the foreign affairs exception to the APA. The court went on to find that USTR had failed to adequately respond to comments filed as part of the notice and comment process for the tariff actions as required by the APA, although the court eventually upheld the tariffs after USTR filed a supplemental response to the comments. The case is still on appeal at the U.S. Court of Appeals for the Federal Circuit (CAFC).
Another consideration related to which trade actions might be subject to the APA is their constitutional basis. Many of the trade laws discussed above, including Section 301, are traditionally considered to be an exercise of Congress’s constitutional authority to “regulate commerce with foreign nations” under Article I, Section 8, which has been delegated with certain guidelines to the executive branch to implement. Actions authorized by these statutes are considered distinct from trade actions that might stem from the president’s Article II authority over foreign affairs, which is the focus of the Rubio memorandum. In addition, antidumping and countervailing duty decisions under Title VII of the Trade Act of 1974 are expressly subject to judicial review in Title 28, Section 1516a(b), of the U.S. Code, under an arbitrary and capricious standard. Likewise, decisions under Section 201 of the Trade Act of 1974 are reviewable by the Court of International Trade under Title 28, Section 1581(i), of the U.S. Code, and the U.S. International Trade Commission is required to hold a public hearing and afford opportunities for stakeholder comments in such proceedings under Title 19, Section 2252(b)(3), of the U.S. Code. In the end, it is unlikely that the administration will be able to get traditional trade statutes like Section 301, Section 201, or Title VII antidumping and countervailing duties excepted from APA procedural provisions or judicial review, but they might have better luck with IEEPA and Section 232.
Q2: Have the president’s previous tariffs been challenged in court?
A2: The use of any of these tariff authorities by President Trump is almost certain to be challenged by importers or other stakeholders, but as we pointed out in a previous article, such claims would face a steep uphill climb if past precedent is any indication. The courts, including the Supreme Court, traditionally have been reluctant to interfere with the president’s exercise of foreign affairs and tariff powers. To be sure, most claims have advanced constitutional or statutory, rather than APA-based, arguments.
The CAFC stated in Maple Leaf Fish Co. v. United States, 762 F.2d 86 (Fed. Cir. 1985) that courts have “a very limited role” in reviewing presidential trade actions “of a highly discretionary kind,” such as tariffs or import quotas under Section 201, and such actions can only be set aside if they involve “a clear misconstruction of the governing statute, a significant procedural violation, or action outside delegated authority.” Maple Leaf Fish Co. is particularly relevant since the CAFC has jurisdiction over most trade law appeals.
While importers have previously challenged President Trump’s Section 232 tariffs on imported steel and aluminum and his Section 301 tariffs on Chinese products, these cases have gone nowhere. In American Institute for International Steel (AIIS) v. Morgan, Case: 19-1727 (July 28, 2020), the CAFC reaffirmed that the Section 232 tariffs did not violate the Constitution’s Separation of Powers under the non-delegation doctrine. In Transpacific Steel v. U.S, and in PrimeSource Building Products v. U.S., Case No. 2021-2066 (Fed. Cir. 2023), the CAFC found that delays imposing Section 232 tariffs beyond the 180 days spelled out in the statute were still within the president’s authority. Likewise, the CIT rejected a challenge to President Trump’s Section 301 tariffs, although the case is still pending on appeal.
Q3: Will there be new challenges, and how are they likely to play out?
A3: Given the current Supreme Court’s willingness to revisit past precedents and the anticipated high costs of the tariffs, there will almost certainly be legal challenges to the administration’s trade actions. This prediction holds true even if the Rubio memorandum successfully exempts certain trade actions from the judicial review under the APA’s “arbitrary and capricious” standard, because some of the most promising claims against the Trump administration’s recent tariffs are based on constitutional arguments.
President Trump’s tariffs on steel, aluminum, and Chinese products under Sections 232 and 301 would likely be on solid ground given past court decisions upholding similar actions in Trump 1.0, although his Section 232 tariffs on imported autos could be challenged on statutory grounds given the five-year lapse between issuance of the Department of Commerce’s report on February 19, 2019, and his decision to act by imposing 25 percent tariffs on imported autos and core parts. Likewise, President Trump’s “Liberation Day” reciprocal tariffs on a broad swath of U.S. trading partners could be more exposed, given their unprecedented scope. Importers are likely to argue (1) that the reciprocity tariffs violate the Supreme Court’s recent revival of the “major questions doctrine” under Chief Justice Robert’s opinion in West Virginia v. Environmental Protection Agency, 597 U.S. 697 (2022), which held that administrative agencies do not have the power to regulate on a “major questions” of extraordinary economic and political significance unless they have clear statutory authority from Congress; and (2) that the statutes violate the nondelegation doctrine because they completely cede Congress’s power to levy tariffs to the president without providing an intelligible principle or constraining guidelines on how to implement such tariffs. While the non-delegation doctrine has been a dead letter since the 1930s, some of the conservative justices (e.g., Justice Gorsuch) have expressed an interest in revisiting it (and a nondelegation challenge to the FCC’s University Service Fund is currently before the Supreme Court in Federal Communications Commission v. Consumers’ Research). Any challenges to the Trump tariffs will initially be heard at lower levels but will likely get to the Supreme Court eventually. As discussed above, both the Supreme Court and lower courts have repeatedly upheld tariff statutes against nondelegation attacks. As a practical matter, many federal judges will likely be unwilling to check the president’s authority because they perceive his tariff policies as having just received a popular mandate and because they are reluctant to second-guess a presidential determination of an emergency or national security threat. As explained in our previous paper, one key issue to watch is whether lower-level judges are willing to preliminarily or temporarily block a presidential action that rests on a declaration of emergency or national security finding while the litigation plays out.
Warren Maruyama is former USTR general counsel under President George W. Bush and former White House policy staffer under President George H.W. Bush. Meghan Anand is a practitioner of international trade and investment law. William Reinsch is senior adviser and Scholl Chair Emeritus at the Center for Strategic and International Studies in Washington, D.C.
To read the full analysis, click here.