information provided by NADA

Today's decision will have a limited effect on cars and trucks

What’s new: On February 20, the Supreme Court struck down the sweeping tariffs that President Trump imposed using the International Emergency Economic Powers Act (IEEPA).

Tell me more: The Court ruled that the IEEPA (a 1977 emergency law) does not grant the president the authority to unilaterally create broad import taxes. The President has used IEEPA to impose tariffs on nearly every country, including “fentanyl” tariffs on Mexico, Canada, and China, and “reciprocal” tariffs on dozens of trading partners. The administration has used reciprocal tariffs as leverage in trade agreement negotiations.

Why it matters: This decision is a legal defeat for the administration’s tariff policy, but it has a limited effect on cars and trucks. For the auto industry, most trade barriers remain in place because they were enacted under different legal authorities. Tariffs on steel and aluminum, and the 25% duty on light- and heavy-duty vehicles and parts, rely on Section 232 of the Trade Expansion Act of 1962. Because that law provides different legal grounds, those tariffs are unaffected. Existing treaties also remain in effect, including the U.S.-Mexico-Canada Agreement (USMCA) and bilateral agreements with South Korea, Japan, and the European Union, which impose a 15% tariff on vehicles and auto parts.

What we are doing: NADA has advocated against the imposition of tariffs on auto and auto parts from U.S. trading partners, emphasizing the effect tariffs will have on vehicle affordability, vehicle sales, and dealership viability.  NADA has met with the White House, the Office of the U.S. Trade Representative, the Department of the Treasury, the Department of Commerce, and other government agencies.  In November 2025 and January 2026, NADA and ATD formally wrote to the U.S. Trade Representative, advocating for the renewal of the USMCA to keep vehicles affordable and ensure a robust supply chain.