China’s largest automaker just filed the first tariff lawsuit by a Chinese car company against the United States government. The legal argument is about import duties on bus parts and batteries. The strategic play is about something bigger.

BYD’s four American subsidiaries filed suit at the US Court of International Trade on January 26, arguing that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) exceed presidential authority. The company wants every dollar back, plus interest.

The Fact: BYD America, BYD Coach & Bus, BYD Energy, and BYD Motors filed Case No. 26-00847, challenging nine executive orders that imposed tariffs on Chinese imports since February 2025.
The Delta: BYD already manufactures electric buses and trucks at a 550,000-square-foot plant in Lancaster, California, employing 750 workers. This isn’t a foreign company lobbing legal complaints from overseas. It’s an employer with American operations and American employees paying American tariffs.
The Buyer Impact: If the Supreme Court strikes down IEEPA tariffs, the 100% duty wall blocking BYD passenger cars from the US market gets significantly thinner. Every American EV buyer should be paying attention.

BYD’s legal argument mirrors thousands of other companies

BYD’s core claim is straightforward: IEEPA doesn’t mention the word “tariff,” “duty,” or “tax” anywhere in its text. The law was written in 1977 to let presidents freeze assets and restrict trade during genuine emergencies, not to impose sweeping border taxes on everyday goods.

“The text of IEEPA does not employ the word ‘tariff’ or any term of equivalent meaning,” the lawsuit states.

BYD isn’t alone in this argument. Over 2,000 companies have filed similar suits at the Court of International Trade, including Costco, Toyota, Goodyear, Prada, and Valero Energy. The collective tariff refund at stake across all cases could exceed $150 billion.

But BYD is the first Chinese automaker to take this step. That distinction matters.

The Supreme Court holds the key

Every one of these tariff lawsuits is frozen. The Court of International Trade issued a stay on all IEEPA-related cases, waiting for the Supreme Court to rule in the consolidated V.O.S. Selections v. Trump and Learning Resources v. Trump cases. The justices heard oral arguments on November 5, 2025. A decision is expected by June 2026 at the latest.

Both the Court of International Trade and the Federal Circuit Court of Appeals already ruled that IEEPA doesn’t authorize tariffs, with the Federal Circuit voting 7-4 against the government. Legal analysts who watched oral arguments say justices from both liberal and conservative wings pressed hard on the government’s position, questioning whether Congress ever intended to give the president unlimited tariff power through a 1977 emergency statute.

If the Supreme Court agrees with the lower courts, the entire IEEPA tariff regime collapses. That means refunds for every importer who filed suit, including BYD.

BYD’s US presence is bigger than most Americans realize

BYD doesn’t sell passenger cars in the United States. The 100% tariff on Chinese-made EVs, layered on top of the IEEPA duties, makes that impossible. But the company has real American operations.

The Lancaster, California facility builds electric buses and trucks. BYD Energy handles battery and energy storage systems. BYD Motors manages imports and sales of commercial vehicles. The company also sells solar panels in the US market.

These operations require imported components, and those components have been hit with tariffs BYD calls “significant” in its court filing. The lawsuit is partly about recovering those costs. But filing an independent complaint also protects BYD’s ability to claim refunds regardless of how the Supreme Court structures its ruling.

EVXL’s Take

This lawsuit is a legal chess move, and it’s a smart one.

BYD didn’t need to file separately. The company could have waited for the Supreme Court ruling and pursued refunds through administrative channels. Instead, it put its name on a formal complaint, established its legal standing, and positioned itself for the fastest possible refund timeline.

But look past the immediate tariff dispute. If the Supreme Court strikes down IEEPA tariffs, the biggest trade barrier keeping Chinese EVs out of the American market doesn’t disappear overnight. Section 301 tariffs (the 100% duty on Chinese EVs imposed under Biden and maintained by Trump) remain. So does the connected vehicle software ban the Commerce Department finalized in 2024.

Still, the legal ground shifts. If IEEPA authority falls, the administration loses its fastest tool for imposing new tariffs without Congressional approval. That changes the calculus for any Chinese manufacturer considering a US market entry, whether through direct imports, Canadian assembly, or a domestic factory.

We’ve tracked BYD’s global strategy for over two years now. The 2,000-dealer European build-out, the paused Mexico factory, the 620,000-unit sales gap over Tesla in 2025, and the factory network spanning Hungary, Turkey, and Brazil. The pattern is consistent: BYD treats every trade barrier as a problem to solve, not a reason to stop.

This lawsuit fits that pattern. BYD’s executive vice president Stella Li said in 2024: “We don’t need to enter the US market. We’ve got a lot of opportunities to become a great company with the many markets outside of the US.” That was the public message. Filing a tariff lawsuit in a US federal court tells a different story.

Expect a Supreme Court ruling by mid-2026. If IEEPA tariffs fall, watch for BYD to accelerate its North American positioning within months, not years.

Editorial Note: AI tools were used to assist with research and archive retrieval for this article. All reporting, analysis, and editorial perspectives are by Haye Kesteloo.