The US Court of International Trade issued summary judgment in favor of the Trump administration on Thursday in a case brought by a US auto-parts dealer challenging a presidential order that closed a tariff loophole for imports under $800.
Plaintiff Detroit Axle sued the administration in May 2025 following numerous executive orders under a declared national emergency that sought to establish a vast tariff scheme on goods imported into the US. The suit involved questions over the extent of administrative authority as well as the balance of power between the executive and legislative branches.
The auto-part maker in particular challenged President Donald Trump’s suspension of the “de minimus exemption” within tariff statutes, which had allowed individual importers to avoid paying duties for goods under $800. Trump rescinded the exemption by invoking the International Emergency Economic Powers Act (IEEPA), which allows the president to “nullify [or] void” the “exercising of any…privilege with respect to” transactions involving “any foreign country or national thereof” so long as an “unusual and extraordinary threat” prompts a national emergency declaration.
Plaintiff claimed that, in light of the US Supreme Court ruling in Learning Resources, Inc. v. Trump, which held that the IEEPA does not empower the president to impose tariffs, the statute similarly does not empower Trump to remove the de minimus exemption. Alternatively, Detroit Axle argued that agency adoption of the rescission violated the Administrative Procedures Act (APA).
In its discussion, the court employed a blend of textual and legislative history analysis. The court determined the plain text of federal statutes define the exemption as a privilege that falls under the president’s IEEPA authority. Plaintiffs argued that the term “privilege” should be limited to mean traditionally recognized property privileges, and as such the president had no authority to “nullify” the exemption. The court acknowledged that lawmakers had considered these types of privileges when it drafted the IEEPA, but held that nothing suggested that they intended to limit the president’s authority to only those privileges.
Unlike with the tariffs at issue in Learning Resources, the court held rescinding the exemption was not an exercise of legislative power. Detroit Axle argued that allowing Trump to suspend the de minimus exemption would violate the “nondelegation doctrine,” which prevents one branch of government from delegating its core powers to another branch. Plaintiffs claimed that the power to rescind usurped Congress’ “power of the purse” or constituted action similar to a “line item veto,” in which the president picks and chooses which provisions in a congressional bill will become law.
However, the court held that because the IEEPA provided the president with an “intelligible principle,” limiting the president to rescind only “privileges,” the statute did not improperly delegate the power of the purse. Additionally, because rescinding the exemption did not substantially alter Congress’ tariff scheme, but only brought low-cost imports under general tariff controls during national emergencies, the issue was not sufficiently analogous to a line item veto.
Finally, the court said agencies that implemented the executive rescission did not violate the APA because “agency action [that] merely implements a lawful Presidential exercise of discretion… is…not subject to the APA.”
Congress in 2015 expanded the de minimus exemption from imports under $200 to imports under $800 in order to “provide significant economic benefits to businesses and consumers…and the economy of the United States.” In 2025 Congress passed the One Big Beautiful Bill Act, which statutorily repealed the de minimus exemption effective July 2027. The shift reflects growing protectionist stances among Trump-led Republicans, who believe the open-trade policies of previous decades have hurt American business and manufacturing.