China’s largest electric vehicle maker, BYD, sues over tariffs with a lawsuit against the U.S. government. It’s a challenge against tariffs that have effectively kept its passenger cars out of the U.S. market. The case was lodged at the U.S. Court of International Trade by four US-based BYD subsidiaries, covering commercial vehicles, batteries, energy systems and vehicle imports.
It gets technical, so bear with. At the core of all this is a legal argument about presidential authority. BYD is contesting tariffs imposed under the International Emergency Economic Powers Act (IEEPA), a law historically used to regulate sanctions and financial restrictions rather than border taxes.
BYD argues that the IEEPA does not explicitly authorise tariffs and that duties collected under this framework are outside of the law. The company is then seeking to have these measures struck down, enforcement blocked, previously paid tariffs refunded – and here’s the kicker – with interest.
The tariffs in BYD’s sights were brought in by Donald Trump’s administration as part of a broader package of trade restrictions targeting Chinese imports. While BYD doesn’t sell passenger EVs in the U.S., it does operate manufacturing and assembly lines for electric busses, trucks and battery systems. Ironically, work on these assembly lines employs hundreds of Americans, which was an important part of Trump’s ever-rambling political schtick. Perhaps it got lost among the China-as-a-strategic-rival talk?
BYD sues U.S. government: precedents
The lawsuit puts BYD on a growing list of companies challenging the same legal mechanism. Thousands of firms, ranging from retailers to automakers have filed similar claims. A combined related case – Learning Resources v. Trump, and Trump v. V.O.S. Selections, Inc. – is now before the Supreme Court.
For BYD this isn’t so much about U.S. market entry as it is about precedent. A ruling that curtails executive tariff powers could reshape the playing field in favour of Chinese companies, even as political barriers to Chinese EVs in the U.S. remain firmly in place.
