The Supreme Court of the US has ruled unconstitutional the auto tariffs imposed under President Donald Trump's invocation of the International Emergency Economic Powers Act (IEEPA), delivering a major blow to one of the administration's most controversial trade tools. While the ruling opens the door to potential refunds, it leaves the broader auto tariff framework largely intact — and companies should not expect swift relief.
Over the past year, US automakers and their supply chains have paid as much as US$8.6 billion in tariffs under the now-invalidated measures. While those funds are theoretically refundable, industry insiders widely believe that actual cash reimbursements will not materialize in the short term.
An onion-like tariff structure
Supply chain players describe the US automotive tariff regime as layered "like an onion." The court ruling removes tariffs derived from IEEPA, but the core "national security" duties imposed under Section 232 of the Trade Expansion Act remain firmly in place.
As a result, negotiated rates of roughly 15% continue to apply to vehicle imports from allies such as Taiwan, Japan, South Korea and the European Union, while most other countries face a baseline 25% tariff.
Although Trump later announced global tariffs starting at 10% and subsequently raised them to 15%, these are unlikely to stack on top of existing auto duties. In practical terms, the overall trade framework for vehicles remains largely unchanged despite the court ruling.
Refund eligibility for non-core components
According to foreign media reports citing analysis by PricewaterhouseCoopers (PwC), a modern vehicle contains tens of thousands of parts, and certain "non-core components" may now qualify for refunds.
These include interior plastic parts, textile trims and selected metal fasteners that were previously subject to additional tariffs ranging from 10% to 50%. With the legal foundation for those duties struck down, approximately US$8.6 billion collected through October 2025 could be classified as recoverable overcharges.
However, legal eligibility does not automatically translate into swift repayment. The Trump camp has signaled it may seek to delay refund payments through extended litigation that could stretch on for as long as five years.
Administrative bottlenecks and renewed legal battles
Even after a favorable court ruling, companies face two major obstacles.
First is administrative congestion. The review process at US Customs and Border Protection (CBP) could become severely backlogged as firms file refund claims, extending timelines considerably.
Second is policy counteraction. Within hours of the ruling, the Trump administration invoked Section 122 of the Trade Act of 1974 to impose a temporary 10% global tariff, effectively reigniting legal battles and potentially offsetting the tax relief created by the court decision.
Implications for Taiwanese suppliers
Taiwanese automotive parts makers exporting to the US may, in theory, benefit from the refund opportunities identified by PwC. In practice, however, they face the same procedural bottlenecks and policy uncertainty confronting their global peers.
Industry sources stress that amid the Trump administration's shifting legal tactics and repeated adjustments to tariff structures, Taiwanese manufacturers must strengthen their resilience — balancing legal safeguards with flexible pricing strategies to navigate an increasingly unpredictable US trade environment.
Article edited by Joseph Chen
