Understanding Today’s Tariffs
What the Supreme Court Ruling Means
A Plain-Language Guide for Our Customers | Updated June 2026
We understand that recent news about tariffs—especially the February 2026 Supreme Court ruling—has raised a lot of questions. Many of our customers have asked why prices for auto parts and steel- and aluminum-based products haven’t come down, and whether refunds are owed for tariffs paid in the past. We want to give you a straightforward, honest explanation.
The Short Answer
⚠️ Why Our Prices Have Not Changed
The Supreme Court’s ruling eliminated only IEEPA-based tariffs. The tariffs that apply to our products remain fully in force under two separate Section 232 proclamations: a 25% tariff on auto parts (Proclamation 10908, March 2025) and a 25% tariff on steel and aluminum derivative articles applied to full customs value (April 2026 proclamation). A Section 122 global surcharge of 15% also remains active until July 24, 2026, though it was recently struck down by the Court of International Trade and is still being collected pending appeal.
We share our customers’ frustration with high costs. But we want to be transparent about the facts so you can make informed decisions.
Four Tariff Authorities—How They Are Different
There are now four distinct legal authorities relevant to our products. They are separate laws and proclamations, with different legal justifications, rates, and court outcomes.
1. Section 232 (Steel & Aluminum) — April 2026 Proclamation (Applies to Our Products)
Legal authority: Section 232 of the Trade Expansion Act of 1962. Proclamation signed April 2, 2026, effective April 6, 2026.
Key structural change: Tariffs now apply to the full customs value of the product, not just the metal content. The prior system of splitting value between metal and non-metal has been eliminated.
Current rates:
- 50% — Articles made entirely or almost entirely of steel, aluminum, or copper (e.g. steel coils, aluminum sheet)
- 25% — Derivative articles substantially made of metal (more than 15% metal by weight). This is the rate most relevant to metal-intensive auto parts.
- 15% (temporary through Dec 31, 2027) — Certain metal-intensive industrial and electrical grid equipment (Annex III)
- 0% additional — Articles where metal content is less than 15% of total weight are excluded entirely
- 10% — Derivative articles made entirely with U.S.-smelted/cast/poured metal
- 200% — Russian-origin aluminum (unchanged)
Important: Parts made of a combination of steel, aluminum, and/or copper are subject to only one rate — they do not stack. The Supreme Court’s February 2026 ruling did NOT address Section 232.
2. Section 232 (Auto Parts) — March 2025 Proclamation (Applies to Our Products)
Legal authority: Section 232, Proclamation 10908, signed March 26, 2025, effective May 3, 2025 for auto parts.
What it covers: Passenger vehicle and light truck parts specified in the proclamation annex, including certain engines and engine parts, transmissions and powertrain parts, and electrical components.
Rate: 25% on the full customs value of covered auto parts. This rate is unchanged by the April 2026 proclamation.
Relationship to the steel/aluminum Section 232: These are two separate proclamations. An auto part may be subject to both — but tariffs do not stack on the same content. The applicable rate is determined by the specific HTS classification.
Key fact: This proclamation was not addressed by the Supreme Court ruling and remains fully in effect.
3. IEEPA Tariffs — Struck Down by the Supreme Court (Did Not Apply to Our Products)
Legal authority: The International Emergency Economic Powers Act (50 U.S.C. §1701–1706), enacted in 1977.
What the Supreme Court decided: In Learning Resources, Inc. v. Trump (February 20, 2026), a 6–3 majority held that IEEPA does not authorize the President to impose tariffs. All IEEPA-based tariffs terminated at 12:00 a.m. on February 24, 2026.
Why this did not lower our prices: Products subject to Section 232 tariffs were already excluded from IEEPA tariff stacking. Our products were not subject to IEEPA tariffs — so their elimination had no effect on what we pay.
4. Section 122 — Global Surcharge (Active but Under Legal Challenge)
Legal authority: Section 122 of the Trade Act of 1974 (19 U.S.C. §2132). Invoked for the first time ever on February 20, 2026, effective February 24, 2026.
Current rate: 15% — raised from the initial 10% to the statutory maximum during the active period.
Expiration: The surcharge expires automatically on July 24, 2026 (the 150-day statutory limit). Congress cannot easily extend it; the President cannot extend it unilaterally.
Court of International Trade ruling (May 7, 2026): A 2-1 CIT panel ruled the Section 122 surcharge unlawful, finding the statutory conditions were not met. However, the injunction only protects the specific plaintiffs. The surcharge remains in effect and is still being collected by CBP from all other importers, pending appeal to the Court of Appeals for the Federal Circuit.
What comes next: The Administration has launched Section 301 investigations expected to conclude before July 24, 2026. New Section 301 tariffs may replace Section 122 on or before its expiration.
Side-by-Side Comparison
|
Section 232
Steel & Aluminum
Apr 2026 Proc. |
Section 232
Auto Parts
Mar 2025 Proc. |
IEEPA
Struck Down |
Section 122
Global Surcharge |
| Legal Basis |
Trade Expansion Act of 1962 |
Trade Expansion Act of 1962 |
IEEPA (1977) |
Trade Act of 1974 |
| Rate |
25% on full value for derivative/auto parts;
50% for pure metal articles |
25% on full customs value of covered auto parts |
10–145%+ by country
(terminated) |
15% (raised from initial 10% to statutory max) |
| Duration |
Permanent |
Permanent |
Terminated Feb. 24, 2026 |
Expires July 24, 2026
(Congress extension unlikely) |
| Court Status |
✓ Valid
Not before the Supreme Court |
✓ Valid
Not before the Supreme Court |
✗ Struck down
SCOTUS Feb. 20, 2026 |
⚠ Contested
CIT struck down May 7, 2026 — still collected pending appeal |
| Applies to Our Products? |
YES — 25% on metal-intensive auto parts |
YES — 25% on covered Ferrari/Maserati parts |
No longer |
YES — 15% on applicable products until July 24, 2026 |
What About Refunds?
This is a question we hear often, and we want to address it honestly.
For IEEPA Tariffs (Not Our Products)
The Supreme Court’s ruling established that IEEPA tariffs were unlawful. Importers who paid IEEPA duties are actively pursuing refunds through the Court of International Trade:
- The U.S. government stipulated it would not contest the CIT’s authority to order reliquidation and refunds for IEEPA duties.
- Refunds flow to the importer of record — not to end consumers who paid higher retail prices.
- There is no established legal mechanism by which end consumers receive refunds for tariff costs passed through in product pricing.
For Section 232 Tariffs (Our Products)
Section 232 tariffs were not struck down. No court has ruled them unlawful. There are no grounds for refund claims related to Section 232 tariffs paid by us or our suppliers.
For Section 122 Tariffs
The May 7, 2026 CIT ruling may eventually lead to refunds for the specific plaintiffs in that case. For all other importers, the tariff is still being collected and no refund mechanism exists yet. The tariff expires July 24, 2026 regardless, which limits the practical refund window even if the ruling is upheld on appeal.
Why Our Costs Remain High
To be transparent about what drives our pricing as of June 2026:
- Section 232 auto parts tariff (Proclamation 10908): 25% on the full customs value of covered Ferrari and Maserati parts. In effect since May 3, 2025. Unchanged.
- Section 232 steel/aluminum derivatives (April 2026 proclamation): 25% on full customs value for parts substantially made of metal (more than 15% metal by weight). In effect since April 6, 2026.
- Section 122 global surcharge: 15% (raised from initial 10%) on applicable products. Still being collected pending appeal; expires July 24, 2026.
- All of these duties are paid at the border by importers and are embedded in the wholesale cost of goods throughout the supply chain before reaching our customers.
- We absorb what costs we can and work continuously to find sourcing solutions that minimize the impact on our customers.
✓ What We Are Doing
We are monitoring all tariff developments closely — including the Section 122 appeal, its July 24, 2026 expiration, and incoming Section 301 tariffs. If legal changes result in duty reductions that meaningfully affect our cost structure, we will reflect those savings in our pricing. We are committed to transparency and will update this document as the situation evolves.
Frequently Asked Questions
Q: Did the Supreme Court ruling lower tariffs on auto parts?
No. Auto parts are subject to two separate Section 232 proclamations — one specifically for auto parts (March 2025) and one for steel and aluminum derivatives (April 2026). The Supreme Court ruling only struck down IEEPA tariffs, which were a separate authority. Neither Section 232 proclamation was before the Court.
Q: I read that tariffs are gone — why am I still paying more?
The Supreme Court struck down IEEPA tariffs only. Our products are covered by Section 232, which was untouched by that ruling. Additionally, the Section 122 global surcharge — while recently struck down by the Court of International Trade — is still being collected from most importers pending appeal, and a new wave of Section 301 tariffs is expected before Section 122 expires on July 24, 2026.
Q: Am I entitled to a refund for tariff costs I paid?
Not for Section 232 tariffs, which were never ruled unlawful. For IEEPA tariffs, refund proceedings exist only for importers of record — not end consumers. For Section 122, a narrow group of plaintiffs may eventually receive refunds if the CIT ruling is upheld, but the tariff expires July 24, 2026 regardless. There is no legal mechanism for retail customers to receive refunds for tariff costs passed through in product pricing.
Q: What happens when Section 122 expires on July 24, 2026?
The 15% global surcharge will end automatically. However, the Administration has been running Section 301 investigations expected to conclude before that date, which may introduce new tariffs to replace Section 122. Section 232 tariffs on our products are permanent and will continue regardless.
Q: What is Section 301 and does it affect your products?
Section 301 of the Trade Act of 1974 allows the President to impose tariffs on goods from countries engaged in unfair trade practices. The Administration launched new Section 301 investigations in early 2026, with results expected by summer 2026. It is too early to know which products and rates will be covered. We will update this document when that becomes clear.
Q: Can I see your documentation on these tariffs?
Yes. All proclamations are public record. Key sources: Proclamation 10908 (March 26, 2025 — auto parts), the April 2, 2026 proclamation (steel/aluminum/copper restructuring), CBP CSMS #68253075 (April 3, 2026 guidance), and the CIT’s May 7, 2026 decision in Oregon v. United States and Burlap and Barrel, Inc. v. United States (Section 122). We are happy to provide specific citations upon request.
We value your business and appreciate your patience as we all navigate a complex and rapidly changing trade environment.
If you have further questions, please contact us directly.
