Supreme Court Has Struck Down Trump Tariffs; Where Does That Leave Cars?

This story is being updated and revised to include breaking news as it occurs.

On Friday, February 20, the United States Supreme Court struck down President Trump’s sweeping tariffs, which it said were an overreach of his authority. The 6-3 vote rejected the Trump administration’s argument that the 1970 International Emergency Economic Powers Act (IEEPA) gives the office of the president the power to impose tariffs.

President Trump held a press conference on Friday afternoon in which he said he’d go around the Supreme Court’s decision by signing an order that imposes a 10 percent global tariff. He also said he would direct investigations into “unfair trade practices” in other countries potentially leading to other tariffs being imposed.

It remains to be seen whether any of these changes will help with car prices, which have been rising dramatically in response to the implementation of tariffs last year. For instance, according to a study reported on by Automotive News, sticker prices for vehicles assembled in Canada rose by nearly 10 percent over the past seven months, accounting for a $3991 increase in cost. The prices of cars built in Japan and Germany rose at a slightly lower rate, though still meant thousands of dollars in higher prices, adding $3298 and $2819, respectively.

However, those tariffs weren’t imposed as part of the IEEPA move, so they aren’t included in the Supreme Court’s decision to undo that set of tariffs. The Supreme Court’s ruling also does not overturn levies on steel and aluminum and does not affect tariffs implemented in other ways outside the Emergency Powers Act. Instead, most auto industry tariffs currently in force are levied under trade policies known as Sections 232 and 301, which impose tariffs because of “national security” and “unfair trade practices.”

Car and Driver reached out to several automakers for their reaction to the ruling. General Motors, Nissan, and Toyota declined comment, while Ford told us: “We are studying the effects of the Supreme Court’s decision and assessing its implications. We will continue to work with the Administration and Congress on policies that promote a strong and globally competitive U.S. auto sector.”

Justice Brett Kavanaugh wrote in a dissenting opinion that the reversal by the Supreme Court could result in a “messy” refund push by companies who have paid the tariffs. It’s not clear exactly what that would look like, though companies could be looking to recover billions of dollars in paid but now-invalidated tariff charges—many of which were passed to consumers.

The implementation of the Trump administration’s tariffs sent shock waves through the automotive industry last year. Domestic and foreign automakers alike scrambled to deal with 25 percent import taxes on both vehicles and parts. Manufacturers, including Ford, GM, Honda, and Stellantis, fought for exceptions on cars assembled in Canada and Mexico, with little success.

It wasn’t until August 2025 that the Trump administration announced it would ease tariffs on the auto sector—though only slightly. The change meant that manufacturers paying the 25 percent auto tariff became exempt from paying additional tariffs on aluminum and steel.

With the current news, it’s unclear if or when the tariff situation for the auto industry will improve.

This is a developing story. We will update the story as more information becomes available.

Jack Fitzgerald’s love for cars stems from his as yet unshakable addiction to Formula 1.
After a brief stint as a detailer for a local dealership group in college, he knew he needed a more permanent way to drive all the new cars he couldn’t afford and decided to pursue a career in auto writing. By hounding his college professors at the University of Wisconsin-Milwaukee, he was able to travel Wisconsin seeking out stories in the auto world before landing his dream job at Car and Driver. His new goal is to delay the inevitable demise of his 2010 Volkswagen Golf.