U.S. Supreme Court Invalidates Some Trump Tariffs, But Most Auto Industry Tariffs Remain In Effect

What Car Shoppers Need to Know

• The Supreme Court has ruled that the tariffs the Trump administration enacted under the International Emergency Economic Powers Act of 1977 are unconstitutional.
• The Trump tariffs issued under other laws remain in place, such as those on auto parts, steel, aluminum and vehicles themselves.
• Since most auto-related tariffs are still in effect, and automakers are still paying those significant costs, car buyers should not expect a drop in new-car prices anytime soon.

The Supreme Court ruled Friday that the Trump administration’s “reciprocal” country-by-country tariffs are unconstitutional, but only those issued under the International Emergency Economic Powers Act of 1977. Tariffs enacted under different laws, such as Section 232 of the Trade Expansion Act of 1962, remain in effect. Those tariffs cover things like auto parts, steel, aluminum and the finished vehicles themselves, so car manufacturers are currently still on the hook for billions of dollars in annual tariff costs.

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The consequences from the court’s decision will take a while to become clear. For one, the ruling did not address whether the Treasury Department was obligated to issue refunds to the companies that have paid substantial duties that have now been declared unconstitutional. Such a reimbursement process would be extremely cumbersome and difficult to implement, and administrative costs would remain high.

Though most auto-related tariffs aren’t directly affected by the court’s ruling, subcontractor and materials-vendor companies in affected countries that supply the auto industry should get at least some tariff cost relief — and those savings can be passed on to their clients. Even that relief could be temporary, however. The Trump administration may seek to reimpose its reciprocal tariffs via other existing laws, so the effective permanence of the court’s decision is in question. The bottom line for consumers is that the Supreme Court’s decision won’t result in lower prices for new cars anytime in the immediate future.

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