On May 28 (U.S. time), the U.S. Court of International Trade ruled that President Donald Trump’s “Liberation Day” tariffs, enacted on April 2, 2025, were illegal and exceeded the authority granted under the International Emergency Economic Powers Act (IEEPA) of 1977.

The lawsuit was filed by the Center for Justice and Liberty, a nonprofit and nonpartisan legal organization, on behalf of five small American businesses affected by the tariffs.

According to the ruling, unless the government secures an emergency stay through appeal, U.S. Customs and Border Protection (CBP) must stop collecting all reciprocal tariffs and fentanyl-related tariffs announced on April 2, refund all duties already paid, and reinstate the de minimis duty exemption policy (i.e., $800 tax-free threshold).

Important Point of the Ruling

● Background of the Case:

The Trump administration, citing a “national emergency” under the International Emergency Economic Powers Act (IEEPA), imposed a flat 10% tariff on imported goods from several countries, including China.

● Court Decision:

All three judges unanimously held that a prolonged trade deficit and dependence on foreign manufacturing do not constitute an “unusual and extraordinary threat” as defined under IEEPA. Therefore, the President lacked the authority to impose broad tariffs on that basis.

● Legal Grounds:

The court found that Trump’s tariff actions violated the constitutional principles of the nondelegation doctrine and the major questions doctrine — both of which require clear congressional authorization when the executive branch makes decisions involving major economic policy.

● The Outcome of the Ruling:

The court issued a permanent injunction prohibiting the enforcement of the tariffs in question and ordered U.S. Customs and Border Protection (CBP) to cease collecting the related duties. In addition, duties already collected may have to be refunded to importers.

Summary of the May 28 Ruling

If the 20% tariff on FinTN is revoked and the $800 de minimis exemption is reinstated, it would effectively restore the trade environment to its pre-Trump era status. All business models related to cross-border e-commerce with China — including dropshipping — could become highly active again. This is great news!

Just minutes after the U.S. Court of International Trade issued its ruling, the Trump administration immediately filed a notice of appeal. A White House spokesperson stated that the administration would use every available executive power to respond to the crisis. The ruling gives the executive branch up to 10 days to complete the process of halting tariff collections.

May 29: Another Twist in the Trump Tariff Case

On May 29 (local time), the U.S. Court of Appeals for the Federal Circuit approved the Trump administration’s request to temporarily stay the U.S. Court of International Trade’s ruling that had prohibited enforcement of the tariff measures imposed under the International Emergency Economic Powers Act (IEEPA).

The appeals court also ordered both parties to submit written arguments regarding whether the collection of tariffs should be blocked. These filings are due in early June. The court will then decide the next steps. The end outcome remains to be seen!

Not sure how the tariff dispute that erupted in early 2025 unfolded? Keep reading to explore our timeline of key events and check out some practical strategies to help your dropshipping business stay ahead in a rapidly changing tariff landscape.

A Snapshot of Trump’s 2025 Tariff Strategy

Between February and May 2025, President Trump signed multiple executive orders signaling a three-phase approach to tariffs:

Phase 1: National Security-Driven Tariffs

✦ Feb 1, 2025: A 25% tariff was placed on imports from Canada and Mexico; a 10% tariff on Chinese products.

✦ Mar 3, 2025: Tariffs on all Chinese goods were raised to 20%.

Phase 2: Global Expansion of Tariff Measures

✦ Apr 2, 2025:

a. The White House announced “Liberation Day Tariffs” — a 10% tariff on all countries, effective April 5.

b. Countries with the largest U.S. trade deficits, especially China, faced even higher individual tariffs, effective April 9.

c. The duty-free exemption for Chinese packages under $800 was revoked, effective May 2.

✦ Apr 10, 2025: Chinese imports were hit with a steep 125% tariff.

Phase 3: Temporary Relief and Easing with China

✦ Apr 9, 2025: A 90-day suspension was announced for individual tariffs (excluding China), replaced with a flat 10% duty during this period.

✦ May 12, 2025: A 90-day U.S.-China deal was reached:

○ Starting May 14, tariffs on Chinese goods dropped to 30% (10% base + 20% related to fentanyl).

○ Consumer packages from China under $800 saw reduced tariffs — from 120% to 54%, or alternatively, a flat $100 fee (valid May 2 — June 1).

✦ May 29, 2025: The U.S. Court of Appeals upheld the Trump administration's latest tariff policy.

In times of such policy volatility, dropshippers relying on cross-border supply chains must stay adaptable to protect profitability. Read on for practical tips to future-proof your business.

4 Smart Strategies for Dropshippers in a Tariff-Charged World

1. Diversify Your Supplier Base

Relying on one country or supplier, especially from high-tariff regions, can expose your business to major risks. By sourcing from multiple regions, you reduce your dependency and stay flexible. Since late 2024, many sellers have been moving inventory out of China to prepare for trade uncertainties under Trump 2.0.

2. Adjust Pricing Based on Tariff Data

With rising tariffs pushing up product costs, sticking to original pricing can quickly erode your margins. Stay informed about specific tariff rates using the U.S. HS Code lookup tool:

✦ Enter the English product name to find the HS Code.

✦ Then, check the applicable tariff on the U.S. tariff schedule site by entering the HS Code.

For faster access, you can also contact your SourcinBox customer manager for free 1-on-1 assistance with tariff information on any product.

3. Build a Brand to Stand Out

Price wars aren’t your only option. Building a brand gives you more pricing power and long-term customer loyalty. Start by:

a. Defining your brand values (e.g., "Minimalist Living", "Eco-Friendly").

b. Designing a visual identity (logo, colors, packaging) with tools like Canva or a designer.

c. Using SourcinBox’s private-label services to deliver a customized unboxing experience.

d. Sharing your brand story on social media to build a community.

4. Stay Updated on Trade Policy Changes

Tariff rules can change overnight. Follow reliable sources like government websites, trade organizations, and news outlets.

SourcinBox also posts timely tariff updates via blog, TikTok, Instagram, and Facebook, so follow us to stay informed.

While it’s important to monitor tariff changes closely, we believe it's still too early to take drastic action. Stay alert, but stay calm.

Stay Ahead with SourcinBox

Tariff hikes may sting in the short term, but in the long run, they push the industry toward smarter, leaner operations. Dropshippers that focus on branding, supply chain resilience, and value-driven service will stand out as winners.

With SourcinBox as your fulfillment partner, you can confidently navigate trade disruptions and keep growing. Explore our platform for more tools, tips, and insights to level up your business.

O Melhor Agente de Dropshipping para Maximizar Seus Lucros