MEPS: US tariff reset after court ruling, steel protections unchanged

A recent US Supreme Court ruling has changed the legal basis for parts of Washington’s tariff regime, introducing fresh uncertainty for a wide range of imported goods, including many steel-containing products. According to an analysis by MEPS International, however, the core protection for the US steel industry remains unchanged.

On 20 February 2026, the Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not provide a sufficiently clear legal basis for the broad, country-specific tariff system introduced under President Donald Trump. The court underlined that the constitutional authority to levy taxes and tariffs rests with Congress, effectively invalidating the so-called “reciprocal” tariffs imposed under IEEPA.

Steel tariffs, however, are governed by a different legal framework. The 50% Section 232 duties on steel imports – with a 25% rate for the UK – remain in force and were not affected by the ruling. As a result, MEPS says the immediate impact on US steel prices and primary steel import flows is likely to be limited.

Shift to Section 122 changes the wider tariff landscape

In response to the ruling, the US administration moved to preserve tariff coverage by invoking Section 122 of the Trade Act of 1974. This allows the introduction of a temporary, uniform tariff of 10% on imports from all countries for up to 150 days without Congressional approval. While President Trump has indicated the rate could be raised to 15%, MEPS notes that, for now, the legally enacted measure remains at 10%.

This represents a clear break from the previous system under IEEPA, where tariffs varied by country based on trade balances. Under the new approach, all trading partners face the same rate, resetting relative competitiveness. Exporters that had been subject to higher country-specific tariffs may benefit, while others could see their effective tariff burden rise.

Section 122 is, by design, temporary. After 150 days, Congress must either approve an extension or allow the tariffs to lapse. MEPS points out that the administration could also seek to shift to other legal tools, such as Section 301, to establish a more durable framework.

Steel tariffs remain anchored in Section 232

According to MEPS, iron and steel imports are largely insulated from the ruling because they fall under Section 232 of the Trade Expansion Act of 1962, not IEEPA. Those national security tariffs remain the main pillar of US steel trade policy.

While some downstream or steel-containing products had been affected by IEEPA-based measures, the underlying protection for primary steel is unchanged. For this reason, MEPS expects only limited direct impact on the US steel market in the near term.

That said, the analysis notes that policymakers could still choose to expand the scope of Section 232 to include more “derivative” products. Such moves would extend tariffs to a wider range of manufactured goods containing steel, but would also increase complexity for importers, given the need to calculate the value of steel content within finished products.

Indirect effects and downstream risks

MEPS cautions that broader changes to the tariff regime could still influence steel demand indirectly. A uniform Section 122 tariff alters competitive conditions for many downstream products not covered by Section 232. Any resulting shifts in import volumes of those goods could, in turn, affect domestic steel consumption.

The consultancy also highlights uncertainty around recently negotiated trade arrangements. While the US Trade Representative has said that deals concluded under IEEPA remain in force, tariff rates and exemptions that depended specifically on IEEPA executive orders have lost their legal basis unless reintroduced under another statute.

Refunds remain unresolved

Finally, MEPS notes that the Supreme Court did not rule on whether companies are entitled to refunds of IEEPA tariffs already paid. That вопрос has been left to lower courts, meaning the legal status of previously collected duties remains unclear and could take months or even years to resolve.

Source and Photo: MEPS