After Supreme Court ruling, industries still face higher rates

The Supreme Court ruled Friday that President Donald Trump’s “reciprocal” tariffs were unconstitutional, a victory for many consumer companies facing higher import costs.

But the decision does not cover all sectors.

The Supreme Court reviewed tariffs adopted under the International Emergency Economic Powers Act of 1977, or IEEPA, which the Trump administration used to justify its sweeping tariff program. This law had never been used by a president to impose customs duties.

In a 6-3 decision, the Supreme Court ruled that IEEPA “does not authorize the President to impose tariffs.”

Yet hours after the ruling, Trump announced a new 10% overall tariff, and the Supreme Court’s ruling does not cover tariffs enacted under Section 232 of the Trade Expansion Act of 1962. Those duties are intended to target specific products that threaten national security, and they remain in effect after Friday’s ruling.

In addition to his country-specific rates, Trump increased tariffs on imports of steel, semiconductors, aluminum and other products considered to undermine national security.

Here are the sectors that are still facing higher levies even after the Supreme Court ruling.

It is not yet clear to what extent this decision will impact the U.S. and global auto industry. The industry continues to face billions of dollars in tariff costs, depending on the origin of an imported auto part or vehicle.

Last year, the Trump administration largely implemented 25% tariffs on vehicles and some auto parts imported into the United States, citing national security risks. It has since struck independent deals to reduce levies by between 10 and 15% with countries including the UK and Japan. Others, like South Korea, have also made deals to cut rates, but it’s unclear whether those changes have actually taken effect.

“With today’s decision and subsequent developments, there remain many unknowns and important unanswered questions. Now is not the time to let up the pressure,” said Lenny LaRocca, head of the U.S. auto sector for consulting firm KPMG. “Automakers should continue to plan for multiple scenarios and keep supply chain considerations in mind as the trade and pricing landscape continues to evolve.”

The largest American automobile manufacturer, General enginessaid last month that it expected between $3 billion and $4 billion in tariff costs this year, and Ford engine earlier this month, the net impact of its tariffs is expected to be roughly flat year-over-year, at $2 billion in 2026.

Ford told CNBC in a statement that it continues to work with the government on policies that “promote a strong, globally competitive U.S. auto sector.” GM did not immediately respond to a request for comment on the Supreme Court’s decision.

The pharmaceutical industry faces many uncertainties regarding pricing. Trump has repeatedly threatened to impose tariffs on pharmaceutical imports, although those measures have not yet taken effect, in part because of multiyear deals negotiated between the administration and drugmakers.

However, if this were to change, customs duties on pharmaceuticals would still be covered by Section 232.

The administration has proposed imposing tariffs on the industry that could potentially reach up to 250%. Last July, Trump threatened to impose 200 percent tariffs on pharmaceuticals, and the administration has already opened a Section 232 investigation into pharmaceuticals to examine the impact of imports on national security.

Tariff threats are intended to push pharmaceutical companies to manufacture in the United States rather than abroad.

In December, several companies signed a deal with Trump to voluntarily lower their prices in exchange for a three-year exemption from all tariffs on pharmaceuticals — provided they invest more in U.S. manufacturing. This agreement included major players like Merck, Bristol Myers Squibb, Novartis and more.

The furniture industry found little relief following Friday’s Supreme Court ruling.

Last fall, items such as sofas, kitchen cabinets, vanities and more were hit with higher tariffs under Section 232. The duties of around 25% will remain in effect even now that the IEEPA tariffs have been ruled unconstitutional.

The furniture industry is already facing greater uncertainty, with tariffs of 25% expected to rise to 50% in 2027, and broader pressures from rising interest rates and inflation.

Small businesses are being hit the hardest, with fewer resources to work with, while larger companies face bankruptcy, like Value City Furniture’s parent company, American Signature Furniture, which filed for bankruptcy late last year.

Under Section 232, imports of steel and aluminum into the United States are still subject to tariffs.

With higher tariffs on aluminum, companies like Coca-Cola, PepsiCo, Keurig Dr Pepper And Reynolds will continue to face higher costs associated with manufacturing their products.

Trump raised tariffs on aluminum to 50% last year.

Yet some of the key tariffs for the sector were removed, even before Friday’s decision.

In November, Trump issued an executive order exempting several hundred agricultural products, including bananas, coffee and spices, from tariffs. And in September, he also canceled a 10% tariff on Brazilian pulp, a key component of paper towels, diapers and toilet paper.

— CNBC’s Mike Wayland, Annika Kim Constantino, Gabrielle Fonrouge and Amelia Lucas contributed to this report.