BYD has filed a lawsuit against the US government challenging President Donald Trump’s use of executive authority to impose sweeping tariffs and seeking a refund of all duties it has paid since April 2025, according to court documents. The case, filed Jan. 26 before the United States Court of International Trade in New York, marks the first legal challenge by a Chinese carmaker over the tariffs and seeks to void all duties imposed under the International Emergency Economic Powers Act (IEEPA) during the past year.
Four of BYD’s US subsidiaries brought the complaint, arguing that the IEEPA does not authorize the imposition of tariffs or comparable border taxes. The lawsuit states that “the text of IEEPA does not employ the word ‘tariff’ or any term of equivalent meaning,” contending that the administration exceeded its statutory authority by using the law to levy duties on imported goods.
BYD said it filed an independent complaint to preserve its right to recover tariffs it has already paid, plus interest. The filing does not specify a dollar amount but requests reimbursement of all IEEPA-based duties assessed since April 2025.
The case, No. 26-00847, is pending before the trade court, which has jurisdiction over civil actions arising from customs and international trade laws. The lawsuit follows similar legal actions by thousands of companies with US operations that have challenged the Trump administration’s reliance on IEEPA to impose border taxes. Among those filing separate complaints is Toyota.
The legal dispute centers on whether the IEEPA—a statute enacted in 1977 that grants the president authority to regulate commerce during declared national emergencies—permits the imposition of tariffs. BYD’s subsidiaries argue that while the law authorizes certain economic measures, it does not explicitly provide for tariffs or equivalent duties. The administration, by contrast, has maintained that the statute grants broad authority to address threats through economic restrictions, including trade-related measures.
In a separate, high-stakes case, the US Supreme Court is expected to rule on the legality of tariffs imposed under the IEEPA framework. Trade Representative Jamieson Greer said recently that the court is taking its time given the “enormous” stakes involved.
BYD has effectively been excluded from the US passenger vehicle market due to tariffs and planned restrictions on Chinese-origin connected vehicle technology. However, its US presence includes the production of new-energy buses and commercial vehicles, as well as the supply of electric vehicle batteries, energy storage systems and solar panels to US customers.
BYD North America operates a truck and bus manufacturing plant in Lancaster, California, employing approximately 750 workers, according to the company. The facility has produced electric buses and commercial vehicles for several years, supplying public transit agencies and fleet customers.
President Trump has repeatedly argued that Chinese automakers pose a threat to the US auto industry and to national security, warning that imports of Chinese vehicles could undermine domestic manufacturing. At the same time, he has said he would welcome Chinese automakers that choose to build vehicles in the United States using American labor. During his campaign, Trump said factories being built across the border in Mexico should instead be constructed in the United States with American workers. He reiterated in January 2026 at a Detroit event that Chinese companies would be welcome to establish US plants and hire American workers domestically.
The broader policy context includes additional regulatory actions affecting Chinese technology imports. In January 2026, Elizabeth Cannon, executive director of the Commerce Department’s Office of Information and Communications Technology, resigned. Her office had played a central role in establishing strict rules on Chinese vehicle technology imports. The same month, the Commerce Department withdrew a September proposal that would have imposed restrictions on Chinese drones. The administration also agreed to allow Nvidia to sell certain artificial intelligence chips to Chinese customers and dismissed several National Security Council members last year.