In De Lima v. Bidwell, the U.S Supreme Court ruled in 1900 that Puerto Rico was not a foreign territory within the context of tariff laws following its acquisition by the United States after the Spanish-American War. The case arose when Samuel De Lima and Company refused to pay import duties on sugar shipped from San Juan, Puerto Rico to New York City, arguing that since Puerto Rico had become a U.S territory following the Treaty of Paris (1898), it could no longer be considered "foreign," and thus goods imported from there should not be subject to customs duties. The government argued otherwise based on an act passed by Congress which imposed tariffs on all goods imported into America from Puerto Rico. In a 5-4 decision, Justice Henry Billings Brown delivered for majority stating that upon cession of any territory to United States whether through conquest or treaty provisions; such territories cease being foreign under American tariff laws.

In the dissenting opinion for De Lima v. Bidwell, Justice Brown argued that Puerto Rico was not a foreign country in terms of tariff laws after it became a U.S. territory following the Spanish-American War. He contended that upon cession, Puerto Rico ceased to be a foreign country and therefore goods imported from there could not be considered as coming from such under U.S customs laws. The majority's view, he believed, would lead to an absurdity where territories could simultaneously exist within and outside of the United States depending on context or policy area (like tariffs). This interpretation also raised concerns about potential abuse by Congress in selectively applying constitutional protections based on arbitrary determinations of what constitutes 'foreign'.