Notice Removing Trade From APA Review Ultimately Subject to Court Review, Lawyers Say

Lawrence Friedman, partner at Barnes Richardson, said the intent of the order seems to be to "shield agency action on tariffs and export controls from review under the APA." Friedman explained that the APA has an exception for review of agency decisions involving "foreign affairs functions," though he said the "threshold question" is whether the State Department's notice has any legal effect.

"Ultimately, it will be up to the courts to determine what is within the scope of the foreign affairs function," Friedman said. Another international trade attorney said it's unclear how much a federal judge will care about the notice, suggesting a court could "look at it and say, 'do I care about Marco Rubio's opinion about whether this is a foreign affairs function? It's my call.'"

The notice is most relevant for laws that don't explicitly allow for judicial review.

In the realm of export controls, one former government official said the notice is unlikely to immediately affect how agencies issue export control rules. The State Department's Directorate of Defense Trade Controls has long considered its rules exempt from APA review, the former official said, and the Commerce Department's Export Control Reform Act already has an APA carveout.

But the determination, if adopted by other agencies such as Commerce, could potentially impact rules issued by the Bureau of Industry and Security's Office of Information and Communications Technology, the former official said. That office, which has published rules in recent months to place new import restrictions on certain Chinese connected vehicles and drones (see 2501020037 and 2409220002, takes its authority from the International Emergency Economic Powers Act, which the former official said isn’t currently exempt from APA requirements.

The former official said it’s still “unclear” if Commerce will consider ICTS rules to be exempt, adding that the State Department determination will likely be challenged in court.

The notice says that "all efforts, conducted by any agency of the federal government," to control the "transfer of goods, services, data, technology, and other items across the borders of the United States, constitute a foreign affairs function" of the U.S. under the APA. James Ransdell, partner at Cassidy Levy, said the notice could have "broad implications for the speed and manner in which the Administration undertakes to change trade regulations in the future."

John Magnus, president of TradeWins LLC, said the notice likely reflects a desire to avoid repeating the extensive APA-based judicial review that has occurred of tariff initiatives from the first Trump administration. Magnus said APA-based review, keyed to exclusion processes rather than to the underlying tariff measures, had “given litigants and judges a way to circumvent Congress’ choice to make the President’s remedy design in Section 301, Section 232 and Section 201 cases generally non-reviewable in court.” One unfortunate side effect, he added, is a pair of CIT decisions “subjecting USTR officials to the APA even though they operate inside the Executive Office of the President.”

The Court of International Trade in the massive Section 301 litigation held that the lists 3 and 4A tariffs imposed during President Donald Trump's first term constitute agency action under the APA. The court held that "Congress delegated to the USTR authority over modifications to section 301 actions," placing independent authority in the hands of the USTR and not the president, making the Section 301 adjustments agency action.

An international trade attorney said much of the judicial activity on the first Trump administration's tariffs were "justified under" the APA. "I think they just want to be sure that doesn't happen," the lawyer said. To ensure that judicial review is avoided, the new administration is not allowing any more tariff exclusions and, now, has issued a notice declaring tariff action to be non-reviewable under the APA, the lawyer said.

Without the elimination of the exclusion process, "it's otherwise an engraved invitation" to various CIT judges to "rifle around in [the government's] underwear drawer, which they do not want," the lawyer said. The attorney added that the trade court's foray into Section 232 and Section 301 action has led everyone at the Office of the U.S. Trade Representative to be "afraid of their own shadow," since they are concerned all of their communications will become part of a judicial record in a case on any tariff action. The result has impacted the ongoing Section 301 investigations on Nicaragua, legacy chips from China and shipbuilding, the attorney said.