For Japanese companies engaged in manufacturing in, exporting to, or investing in the United States, U.S. trade and customs law has become an increasingly difficult area of law to navigate. In recent years, changes in U.S. tariff policy, particularly under the administration of President Donald J. Trump, have altered long‑standing assumptions about market access, supply chains, and the stability of trade rules. These changes have also placed renewed attention on a relatively specialized but powerful federal court: the U.S. Court of International Trade (“CIT”).
This article provides a practical overview of the CIT, its jurisdiction and procedures, and the types of disputes it commonly hears. It then examines recent U.S. tariff measures introduced under the Trump administration, explains how those measures have contributed to increased litigation before the CIT, and explores how these developments may impact Japanese companies.
The U.S. Court of International Trade: Jurisdiction and Role
Position Within the Federal Judiciary
The U.S. Court of International Trade is a federal court created under Article III of the United States Constitution. This means CIT judges enjoy life tenure and salary protection under the U.S. Constitution, just like judges of U.S. district courts and courts of appeals. Although it is headquartered in New York City, the CIT has nationwide jurisdiction and may hear cases anywhere in the United States.
Unlike generalist federal district courts, the CIT is a specialized court with exclusive jurisdiction over important transactions affecting U.S. international trade. The CIT’s purpose is rooted in Article I, Section 8 of the U.S. Constitution, which states that “all Duties, Imposts and Excises shall be uniform throughout the United States.” Consistent with this, the CIT’s purpose is to ensure expeditious procedures, avoid jurisdictional conflicts among federal courts, and provide national uniformity in the judicial decision-making affecting important transactions. Appeals from the CIT are heard by the U.S. Court of Appeals for the Federal Circuit, with potential further review by the U.S. Supreme Court.
Exclusive and Specialized Jurisdiction
The scope and purpose of the CIT is primarily defined by Title 28 of the U.S. Code, particularly sections 1581 through 1585. In broad terms, the court has exclusive jurisdiction over civil actions against the United States, its agencies, or its officers arising out of any law pertaining to international trade, which could include the following areas:
- The administration and enforcement of U.S. customs and tariff laws;
- The classification and valuation of imported merchandise;
- The assessment and collection of customs duties;
- Trade remedy determinations, such as antidumping and countervailing duties; and
- Certain challenges to international law-related actions taken by the Departments of Labor, Commerce, Agriculture, or Treasury.
Because the CIT has such broad and exclusive jurisdiction, many disputes that might otherwise be brought in a federal district court must instead be filed in the CIT. For companies engaged in cross‑border trade, the CIT is therefore often the primary judicial forum for resolving disputes with U.S. trade authorities.
Types of Cases Commonly Handled by the CIT
Antidumping and Countervailing Duty Cases
One of the most common categories of CIT cases involves challenges to antidumping and countervailing duty determinations made by the U.S. Department of Commerce and the U.S. International Trade Commission. These cases may involve allegations that imported goods are sold in the U.S. at unfairly low prices (dumping) or benefit from foreign government subsidies.
Japanese companies in sectors such as steel, chemicals, machinery, and electronics have historically been involved in antidumping and countervailing duty proceedings, making this an area of ongoing relevance.
Customs Classification and Valuation Disputes
Another common category of CIT cases involves those filed against U.S. Customs and Border Protection regarding the classification of goods and the imposition of duties. Classification is important because it determines the applicable duty rate and, in some cases, whether additional tariffs or trade remedies apply.
Similarly, the CIT often hears disputes over the proper customs value of imported goods, which serves as the basis for calculating ad valorem duties. These disputes can be particularly important for Japanese manufacturers with complex supply chains, transfer pricing arrangements, or related‑party transactions.
Challenges to Trade Remedy and Safeguard Measures
Additionally, the CIT hears challenges to safeguard measures and other import restrictions imposed to protect U.S. industries and workers. These cases often raise questions about the scope of executive authority and compliance with statutory and international obligations.
Key Procedural Features of the CIT
Composition of the CIT
There are nine judgeships authorized for the Court of International Trade, with appointees serving as Article III judges who have life tenure during good behavior and protection against diminution of salary. Although the CIT is based in New York, the geographic jurisdiction of the court is national in scope, with judges of the court assigned by the chief judge, as needed, to preside over trials at any location within the United States. The court is also authorized to hold hearings in foreign countries.
Most cases are assigned to a single judge, but when “a case involves the constitutionality of an act of Congress, a Presidential proclamation, or an Executive order, or otherwise has broad and significant implications, the chief judge may assign the case to a three-judge panel.” For example, a three-judge panel of the court previously issued a ruling in a case related to tariffs imposed by the President under the International Emergency Economic Powers Act.
Procedural Rules of the CIT
Although the CIT maintains its own rules of procedure, they are patterned for the most part on the Federal Rules of Civil Procedure. The court has held that decisions interpreting the Federal Rules of Civil Procedure are “instructive” in interpreting its own rules. For this reason, a case proceeding before the CIT is similar in many respects to cases before other federal courts.
Nationwide Impact of Decisions
Because the CIT has nationwide jurisdiction and exclusive authority over many trade matters, its decisions often have immediate and broad effect. A single ruling may impact importers across the United States and influence how agencies apply trade laws going forward.
Recent Tariff Measures Under the Trump Administration
Challenges to Tariffs under the International Emergency Economic Powers Act
Under President Trump, U.S. tariff policy has been characterized by a willingness to use tariffs as a tool of economic and strategic leverage. Building on measures first introduced during his earlier term, the administration has continued to emphasize tariffs to address perceived trade imbalances, national security concerns, and supply‑chain resilience. One law that President Trump has used to attempt to accomplish this is the International Emergency Economic Powers Act (“IEEPA”).
However, the CIT recently struck down a large swath of these tariffs, and the U.S. Supreme Court is currently reviewing that decision.
Section 232 Tariffs (National Security)
Section 232 of the Trade Expansion Act of 1962 allows the U.S. government to impose tariffs or quotas on imports for specific national security reasons. Tariffs based on this law have been applied to products such as steel and aluminum and remain a source of uncertainty for Japanese exporters, even where exemptions or quota arrangements are in place. Tariffs imposed under Section 232 have traditionally survived judicial challenge.
Increased CIT Litigation Arising from Tariff Policy Changes
Challenges to Tariffs in the CIT
In response to President Trump’s increased use of tariffs, there has been an explosion of cases challenging the scope of the executive branch’s authority to impose tariffs under existing statutes. Plaintiffs in these lawsuits have argued that certain tariffs exceed statutory limits or were imposed without adequate procedural safeguards.
Other cases focus on whether the government followed required procedures in imposing or modifying tariffs, including notice‑and‑comment obligations, reasoned decision‑making, and consistency with statutory criteria.
Impact on Japanese Companies
As with companies throughout the world, Japanese companies have been affected in several ways by the upheaval in U.S. international trade law. This upheaval has led to disruption of long‑term supply contracts and pricing assumptions. It has also increased compliance burdens related to classification, origin, and valuation of goods that companies seek to export to the United States. And it has led to greater exposure to potential enforcement actions and audits by U.S. Customs and Border Protection. As a result, in some instances, Japanese companies or their U.S. subsidiaries have participated directly or indirectly in CIT litigation, either as plaintiffs, intervenors, or interested parties.
Conclusion
The U.S. Court of International Trade plays a central and increasingly visible role in shaping the legal landscape of U.S. international trade. Against the backdrop of renewed and expanded tariff measures under the Trump administration, the CIT has become a key forum for resolving disputes that directly affect Japanese companies doing business with or in the United States.
As U.S. trade policy continues to evolve, Japanese companies should closely monitor developments at both the policy and judicial levels. A clear understanding of the CIT, combined with proactive compliance and strategic planning, can help mitigate risk and identify opportunities in an uncertain trade environment.
This article does not constitute legal advice but presents only a general overview of common legal principles. Those principles may vary by jurisdiction. You should consult legal counsel with regard to your specific situation. No attorney-client relationship is formed by the publishing of this article.
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