On February 20, the US Supreme Court ruled that President Donald Trump's "reciprocal" tariffs targeting specific countries were unconstitutional, a victory for many consumer goods companies facing rising import costs.

However, the ruling did not cover all industries.

The Supreme Court reviewed tariffs imposed under the International Emergency Economic Powers Act of 1977 (IEEPA), which the Trump administration invoked to defend its comprehensive tariff policy. Previously, the president had never invoked this law to impose tariffs.

The Supreme Court ruled 6-3 that the International Emergency Economic Powers Act "does not authorize the president to impose tariffs."

However, just hours after the ruling, Trump announced a new 10% tariff on global goods, and the Supreme Court's decision did not cover tariffs established under Section 232 of the Trade Expansion Act of 1962. These tariffs are aimed at specific products that threaten U.S. security and remain in effect after the February 20 ruling.

In addition to tariffs targeting specific countries, Trump also raised tariffs on steel, semiconductors, aluminum, and other imports deemed to harm U.S. security.

Even with the Supreme Court's ruling, the following industries still face higher tariffs:

Automobiles

It is unclear how much impact this decision will have on the U.S. and global auto industry. Depending on the country of origin of imported auto parts or complete vehicles, the industry still faces billions of dollars in tariff costs.

Last year, the Trump administration imposed a general 25% tariff on automobiles and certain auto parts imported into the U.S., citing U.S. security risks. The U.S. government subsequently reached agreements with countries such as the UK and Japan to reduce tariffs to 10% to 15%. Other countries, including South Korea, have also reached agreements to reduce tariffs, but it remains unclear whether these adjustments have taken effect.

“With today’s decision and subsequent developments, many unknowns and important questions remain to be answered. Now is not the time to let our guard down,” said Lenny LaRocca, head of the U.S. automotive industry at KPMG. “Automakers should continue to develop plans for multiple scenarios and prioritize supply chain issues, as the trade and tariff environment continues to evolve.”

General Motors, the largest U.S. automaker, said last month it expects to face $3 billion to $4 billion in tariff costs this year, while Ford Motor Company said earlier this month it expects its net tariff impact to be roughly flat year-over-year, at approximately $2 billion, by 2026.

Ford told the media in a statement that it will continue to work with the government to develop policies that “promote a strong and globally competitive U.S. auto industry.” General Motors has not yet responded to the Supreme Court’s ruling.

Pharmaceuticals

The pharmaceutical industry is facing considerable uncertainty due to tariffs. Trump has repeatedly threatened to impose tariffs on drug imports, but these tariffs have not yet taken effect, partly due to a multi-year agreement between the government and pharmaceutical companies.

However, if circumstances change, drug tariffs will still be subject to Section 232.

The government has proposed tariffs on the industry, with a final rate potentially as high as 250%. Last July, Trump threatened a 200% tariff on drugs, and the government has already launched a Section 232 investigation into drug imports to examine their potential impact on U.S. security.

The tariff threat aims to force pharmaceutical companies to manufacture in the U.S., rather than overseas.

Last December, several companies reached an agreement with Trump, voluntarily lowering drug prices in exchange for a three-year exemption from any drug tariffs—provided they increase investment in U.S. manufacturing. Companies participating in the agreement include industry giants such as Merck, Bristol-Myers Squibb, and Novartis.

Furniture

The Supreme Court ruling on February 20th offered little comfort to the furniture industry.

Last fall, sofas, cabinets, dressing tables, and other goods were subject to additional tariffs under Section 232. Even though the IEEPA tariffs have now been ruled unconstitutional, approximately 25% of the tariffs will remain in effect.

The furniture industry already faces greater uncertainty, with the 25% tariff expected to rise to 50% by 2027, in addition to broader pressures from rising interest rates and inflation.

Smaller companies are hit hardest because they have fewer resources available; larger companies face bankruptcy, such as American Signature Furniture, the parent company of Value City Furniture, which went bankrupt late last year.

Food and Consumer Packaging

Under Section 232, steel and aluminum imported into the United States will still be subject to tariffs.

Companies such as Coca-Cola, PepsiCo, Keurig Dr Pepper, and Reynolds will continue to face higher product manufacturing costs due to the increased aluminum tariffs.

Last year, Trump raised the aluminum tariffs to 50%.

However, even before the February 20 ruling, some key tariffs in the industry had been lifted.

Last November, Trump signed an executive order exempting hundreds of agricultural products, including bananas, coffee, and spices, from tariffs. Last September, he also lifted the 10% tariff on Brazilian pulp, a key raw material for paper towels, diapers, and toilet paper.