- Vehicles and parts are spared under the new tariff.
- Steel and aluminium duties still hit carmakers.
- A 15 percent import tariff followed the court loss.
Just when automakers were bracing for another brutal profit grab, the White House handed them a small, but welcome, reprieve. President Donald Trump’s new global tariffs, the ones causing upset across the globe, won’t impact your favorite car brand, the administration says. At least not directly.
After the US Supreme Court struck down many of Trump’s broader tariffs imposed under emergency powers, the administration pivoted fast. A new temporary import duty of 10 percent was announced under Section 122 of the Trade Act of 1974, before the Trump administration quickly raised it to 15 percent in a follow-up move.
The new rule takes effect February 24. The key detail for the auto industry is that vehicles and vehicle parts are exempt.
Also: Trump Tariffs Pushed Some MSRPs Up $4,000, But US-Made Cars Now Top 55%
The temporary duty will last 150 days and is designed to shrink the trade deficit and nudge production back to American soil, though plenty of economists can’t see short-term tariffs persuading businesses to commit millions of dollars relocating to the States under constantly flip-flopping policies.
Indirect Impact
For the auto industry, the exemption is certainly a welcome breather, though there’s a catch. Vehicles, light trucks, certain heavy-duty models, buses, and a wide range of parts will not face the new global levy.
That matters because many automakers are already paying billions under separate tariffs on imported vehicles and components, plus ongoing duties on steel and aluminium. Those sector specific tariffs remain untouched by the Supreme Court ruling.
Congressional Approval
The court’s six-to-three decision focused on tariffs imposed under the International Emergency Economic Powers Act, deciding that the president must gain congressional authorization for such sweeping duties.
The ruling does not clarify whether companies will automatically receive refunds, and legal experts expect a messy and congested process. Illinois Governor JB Pritzker has already launched an $8.6 billion lawsuit on behalf of his state’s residents.
Industry Braces For The Next Move
Meanwhile, the administration has signaled more trade investigations are planned, meaning further tariffs are still on the table. Add in looming USMCA negotiations and the possibility of changes to North American trade rules, and the industry remains on high alert.
For now, dealers and manufacturers can exhale slightly, but they know better than to think Trump won’t lob another trade grenade their way before his time is up.
