Businesses brace for supply chain disruptions and legal challenges as latest move expands Section 232 duties and invokes emergency powers
The Trump administration is significantly expanding tariffs on steel, aluminum and a broad range of imported goods under two federal statutes—Section 232 of the Trade Expansion Act of 1962 and the International Emergency Economic Powers Act (IEEPA).
These moves mark an unprecedented assertion of executive authority over trade and legal challenges are expected.
Section 232 Tariffs on Steel and Aluminum Expanded
On Feb. 10, 2025, President Trump announced a sweeping expansion of the existing 25% tariffs on steel and aluminum, extending them to countries previously exempt under negotiated agreements—including Mexico, Canada, the European Union, and the United Kingdom. These tariffs are set to take effect on March 12, 2025.
Additionally, new duties were imposed on derivative products, including roofing nails, plastic cap nails, and aluminum door frames, with tariffs applying only to the steel or aluminum content of these goods. However, businesses are still awaiting guidance from U.S. Customs and Border Protection on how that content will be calculated.
While the courts upheld Trump’s authority to impose tariffs under Section 232 during his first administration, the March 12 expansion extends that authority to new countries and product categories, raising new legal questions.
IEEPA Tariffs Tied to Fentanyl Crisis
The administration has also imposed a 20% tariff on all Chinese imports, citing China’s alleged failure to curb fentanyl exports into the United States. Additional tariffs were announced against Mexico and Canada for the same reason, but their implementation has been temporarily delayed until April 2, 2025.
IEEPA allows the President to regulate economic transactions in response to a national emergency tied to an “unusual and extraordinary threat” originating outside the U.S. Trump invoked this authority to justify the new tariffs, declaring fentanyl trafficking a national security crisis.
In suspending tariffs on Mexico and Canada, the administration clarified that goods qualifying for preferential treatment under the United States-Mexico-Canada Agreement (USMCA) will not be subject to IEEPA tariffs between March 7 and April 2, 2025. However, non-USMCA-compliant products remain subject to tariffs from March 4, 2025, onward.
What’s Next?
The legality of Section 232 tariffs has already been tested in court, but the use of IEEPA to impose broad-based trade restrictions is uncharted territory. Legal challenges are likely. Businesses importing affected products should assess their supply chains and consider strategies for mitigating cost impacts while monitoring potential legal and policy developments.
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