What The 6-3 Tariff Ruling Means For Auto Part Imports

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Welcome to Auto Care on Air, a candid podcast for a curious industry. I'm Stacey Miller, Vice President of Communications at the Auto Care Association, and this is Traction Control, where we chat about recent news from the global to the local level and what it may mean to the industry featuring guests on the front lines. Let's roll. All right, we have breaking news today. On February 20th, 2026, the U.S. Supreme Court ruled 6-3 that the president does not have authority under the International Emergency Economic Powers Act, IEEE P A, to impose tariffs. The decision applies to AIPA tariffs, including both the AIPA fentanyl-related tariffs on Mexico, Canada, and China, and the AIPA reciprocal tariffs. Now, while the Supreme Court decision eliminates the AIPA tariffs, it does not remove the Section 232 auto parts or Section 232 steel and aluminum tariffs. Products covered by Section 232 orders remain fully subject to those duties. The case will return to the U.S. Court of International Trade to determine the appropriate remedy, including whether and how refunds should be processed. Following the decision, President Donald Trump signed an executive order imposing a temporary global tariff under the Section 122 of the Trade Act of 1974. The administration initially announced a 10% rate, but the rate was increased to 15%, which is the statutory maximum under Section 122, absent congressional action. Now, this does remain a fluid situation and developments may continue. So let's give you a little bit of the background on the Supreme Court decision. In 2025, the administration declared national emergencies and implemented tariffs under AIPA related to fentanyl-related tariffs on imports from Mexico, Canada, and China, and reciprocal tariffs intended to address trade deficits. Importers challenged the tariffs at the U.S. Court of International Trade and in District Court. The Court of International Trade and the U.S. Court of Appeals for the Federal Circuit each concluded that AIPA does not authorize the president to impose tariffs. So on February 20th, 2026, the Supreme Court ruled 6.3 that AIPA's authority to regulate importation does not include the power to impose tariffs, effectively invalidating the AIPA-based tariff measures. The court's decision does not address whether refunds must be issued or how they would be processed. That question will now be addressed by the Court of International Trade. Now let's talk a little bit about the termination of AIPA tariffs. On February 20th, 2026, the president signed that executive order ending the AIPA tariffs, which included the AIPA fentanyl-related tariffs on imports from Mexico, Canada, and China, and AIPA reciprocal tariffs, AIPA Venezuelan oil, AIPA Brazil, AIPA Russian oil in India, and AIPA Cuban oil, AIPA Iran purchases. In a press conference, the president noted that the opinion did not address refunds and indicated that refund issues may be subject to further litigation. Now, what's the effective date? The U.S. Customs and Border Protection, or CBP, issued a notice on February 22nd that the AIPA tariffs will no longer be in effect and will no longer be collected for goods entered for consumption or withdraw from warehouse on or after 12 a.m. Eastern Standard Time, February 24th, 2026. So what should members of the autocare industry consider? Absolutely, record keeping and monitoring, organizing records of all entries subject to AIPA tariffs, monitoring affected entries for liquidation. At this time, no formal refund mechanism has been announced. Now, if you have a protest, correction, or litigation, you may need to evaluate whether to file protests on liquidated entries where appropriate. For unliquidated entries, assess whether post-summary corrections may be available once CBP issues guidance. Consult Trade Council or your customs broker regarding potential refund strategies and litigation options, including filing suit at the U.S. Court of International Trade. Now, what about entry timing and duty calculation? Importers should carefully consider options regarding the timing of entry filings, including whether to delay filing the entry summary and paying duties, and that'll be CBP Form 7501, where appropriate, to potentially avoid payment of AIPA tariffs for the period between the Supreme Court decision and February 24th. Importers are also reminded to coordinate with their customs brokers to confirm the applicable date of entry used for duty calculation, as customs laws and regulations provide several alternatives once cargo has arrived. Now there is some ongoing Section 232 exposure. So while the Supreme Court decision eliminates the AIPA tariffs, it does not remove the Section 232 auto parts or Section 232 steel and aluminum tariffs. Products covered by Section 232 orders remain fully subject to those duties. For auto parts subject to Section 232 orders, those tariffs applied instead of the AIPA reciprocal tariffs. In other words, importers were not paying Section 232 tariffs, not the AIPA reciprocal tariffs. Now let's talk a little bit about that new 15% global tariff under that Section 122. And as we mentioned earlier, that executive order imposes a temporary 15% tariff under Section 122 of the Trade Act of 1974. Section 122 permits the president to impose duties of up to 15% for up to 150 days to address balance of payments concerns unless Congress acts to extend the measure. There is an on-the-water provision, so a limited exemption applies to goods loaded onto a vessel in the final mode of transit before 12.01 a.m. Eastern Standard Time on February 24th. To qualify, goods must also be entered into the United States before February 28th. In terms of exclusions, there are certain goods that are excluded, including certain critical materials and metals used in currency and bullion, energy and energy products, natural resources and fertilizers not produced in sufficient US quantities, certain agricultural products, pharmaceuticals and pharmaceutical ingredients, certain electronics, certain passenger vehicles, trucks, buses, and parts, certain aerospace products, informational materials, donations, and accompanied baggage. There are some additional exclusions, and those include articles currently subject to or later becoming subject to Section 232 actions, USMCA compliant goods of Canada and Mexico, certain textiles and apparel qualifying under CAFTA DR. Now let's talk about stacking. The Section 122 tariff does not apply to products subject to Section 232 steel, aluminum, or auto parts tariffs. However, it applies in addition to other duties, including most favored nation rates, Section 301 duties, anti-dumping, and countervailing duties. Members should review cumulative duty exposure accordingly. Now, there are some potential Section 301 actions. The U.S. Trade Representative Jameson Greer announced that the administration intends to initiate multiple Section 301 investigations addressing alleged unfair trade practices by various trading partners. Referenced areas include industrial overcapacity, forced labor, pharmaceutical pricing practices, digital trade measures, and other sector-specific concerns. The administration has indicated it may pursue an accelerated review timeline. Additional trade actions could develop during or after the 150-day Section 122 period. And there is a continued suspension of the de minimis. A separate executive order confirms that duty-free de minimis treatment remains suspended. Low-value shipments remain subject to applicable duties, including the Section 122 surcharge, where relevant. So what's next? The AutoCare Association is monitoring CBP guidance proceedings at the U.S. Court of International Trade and potential additional trade actions. We are engaging with members and trade council and will continue to provide updates as further clarification becomes available. As always, you can get the latest updates at autocare.org slash trade where you can find the latest as the situation continues to evolve. And if you have questions, please do reach out. Thanks for tuning in to another episode of Autocare on Air. Make sure to subscribe to our podcast so that you never miss an episode. And don't forget to leave us a rating and review that helps others discover our content. AutoCare on Air is a production of the AutoCare Association, dedicated to advancing the autocare industry and supporting professionals like you. To learn more about the association and its initiatives, visit autocare.org.