Supreme Court Strikes Down IEEPA Tariffs: What Comes Next for U.S. Manufacturers and Distributors
Supreme Court ends IEEPA tariffs. What changes under Section 122 and what it means for manufacturers, distributors, and logistics operations.
Resources To Help You Stay Ahead
Navigating Trump 2.0
Veryable is your trusted source for information and insights as you navigate the upcoming policy changes and regulatory shifts driving a U.S. Manufacturing Renaissance under the new administration.
What's Ahead For U.S. Industry?
With Donald Trump back in office and unified Republican control of Congress, U.S. industrial policy is already shifting. Tariffs, tax policy, and regulatory priorities are being reworked in ways that will directly impact manufacturing and distribution operations.
Most leaders don’t have time to track every policy announcement or interpret what actually matters. This resource is built to do that for you. It focuses only on confirmed developments that affect cost structures, supply chains, and operating decisions.
Below is a breakdown of the most relevant policy changes to date, along with a clear view of what has actually changed and what it means for U.S. industry.
Reinstitution and Expansion of Tariffs
Tariffs
Reinstitution and Expansion of Tariffs
Since returning to office in January 2025, President Trump has reestablished tariffs as a central tool of U.S. trade policy, using a combination of executive authority and sector-specific actions to reshape import costs and supply chain decisions.
While initial actions in 2025 focused on reactivating and expanding tariff frameworks, 2026 has been defined by a legal reset and the rapid implementation of new tariff authorities. The timeline below reflects all confirmed tariff actions and closely related enforcement developments year-to-date.
Click Here for a full list of country & product specific tariff rates.
2026 Tariff Developments
April 2nd:
→ The administration modified Section 232 tariffs on steel, aluminum, and copper derivative products by changing how duties are calculated
→ Tariffs are now applied based on the value of the underlying metal content, rather than the total declared import value of the finished good
→ Existing Section 232 tariffs on base metals (up to 50%) remain unchanged
→ The administration introduced new tariffs on select imported pharmaceutical products, marking the first expansion of tariff policy into drug and healthcare-related imports
March 6th:
-> A federal judge scheduled proceedings related to tariff refund claims tied to previously collected IEEPA tariffs, advancing legal resolution of invalidated tariff collections
March 5th:
→ Multiple U.S. states filed lawsuits challenging the administration’s use of Section 122 authority to impose new global tariffs, introducing legal uncertainty around the durability of the current tariff framework
February 24th:
→ A 10% ad valorem tariff on most imported goods took effect under Section 122 of the Trade Act of 1974
→ The tariff applies broadly across countries and product categories, establishing a new baseline import cost structure
February 23rd:
→ U.S. Customs and Border Protection formally ceased collection of tariffs imposed under IEEPA, following the Supreme Court ruling
→ This action terminated enforcement of the prior tariff regime at the border level
February 21st:
→ The administration announced the use of Section 122 authority to impose new tariffs, providing the legal basis for the subsequent 10% global tariff
February 20th:
→ The U.S. Supreme Court ruled that tariffs imposed under IEEPA were unlawful
→ This decision invalidated the existing tariff framework, forcing an immediate transition to alternative legal authorities
Trade Agreements & Supply Chain Realignment
Trade Policy
Trade Agreements & Supply Chain Realignment
The Trump administration is using bilateral trade agreements to realign supply chains, link market access to investment, and reduce reliance on strategic competitors. Below is a consolidated overview of active trade frameworks and finalized agreements.
Active & Recent Trade Agreements (As of May 2026)
US–Taiwan Trade Agreement (Finalized February 2026)
→ 15% U.S. tariff rate confirmed; Taiwan to eliminate/lower tariffs on nearly all U.S. goods alongside large purchase/investment commitments. Learn more.
US-India Interim Trade Framework (Released February 2026)
-> Commits India to reduce tariffs across many U.S. industrial and agricultural categories; including significant changes to auto/motorcycle duties. Learn more.
US-Bangladesh Trade Agreement (Signed February 2026)
-> 19% U.S. tariff framework reported; includes concessions for some apparel made with U.S.-origin inputs. Learn more.
US–Japan Agreement (Active)
→ 15% U.S. tariff framework on nearly all Japanese imports with sector-specific treatment; includes major Japan investment commitments. Learn more.
US–EU Framework (Active)
→ $600B additional investment in the U.S. + $750B in U.S. energy purchases by 2028 under the framework. Learn more.
US–South Korea Strategic Trade & Investment Deal (Active)
→ 15% tariff framework; includes ~$350B U.S. investment and $100B LNG purchases. Learn more.
US–UK Economic Prosperity Deal (Active)
→ Core deal covers autos/steel/aluminum arrangements; Dec pharma agreement exempts U.K.-origin pharma/APIs/med-tech from certain tariffs. Learn more.
US–Switzerland (Implementation Phase)
→ Tariff alignment discussions centered around ~15% baseline and investment commitments; formal implementation timeline remains unclear. Learn more.
US–China (One Year Truce Active)
→ Reported tariff reduction from ~57% to ~47% tied to fentanyl cooperation, ag purchases, and a one-year pause on new rare-earth export controls. Learn more.
US-Vietnam Framework (In Negotiation)
→ Maintains ~20% tariffs on most Vietnamese goods; framework discussions include potential preferential access for U.S. exports. Learn more.
Latin America Frameworks (Argentina, Ecuador, Guatemala, and El Salvador)
→ Early-stage frameworks focused on reciprocal market access and streamlined trade terms; limited tariff detail finalized to date. Learn more.
Incentives For Domestic Manufacturing
Incentives
Incentives For Domestic Manufacturing
The One Big Beautiful Bill Act (H.R. 1) represents a major federal push to accelerate domestic manufacturing and supply chain investment. It centers on tax treatment changes that improve cash flow, shorten payback periods, and increase the attractiveness of U.S.-based production.
What’s New:
Immediate R&D Expensing (Restored)
→ Beginning in tax year 2025, domestic R&D expenditures can be fully deducted in the year incurred, reversing the prior requirement to amortize over five years.
→ Includes provisions allowing smaller firms to apply this treatment retroactively to recent tax years.
100% Bonus Depreciation (Restored)
->Section 168(k) restores full expensing for qualified machinery, equipment, and tools placed in service after January 19, 2025.
Qualified Production Property (QPP) Expensing (New Category)
→ Section 168(n) introduces full expensing for certain production-related real estate investments, including new facilities and qualified manufacturing improvements.
→ Scope and qualification criteria remain a key detail to monitor as implementation guidance is finalized.
EBITDA-Based Interest Deductibility (Restored)
-> Reverts the business interest deduction standard from EBIT back to EBITDA, increasing allowable deductions for capital-intensive manufacturers.
Why This Matters
These provisions materially change the economics of U.S.-based production:
--> Faster capital recovery: Immediate expensing reduces payback periods on automation, equipment, and facility investments
--> Improved project viability:More projects clear internal hurdle rates due to upfront tax treatment
--> Stronger financing capacity:EBITDA-based deductions increase debt capacity for large-scale industrial investments
--> Stackable with existing incentives: When combined with CHIPS and IRA programs, these provisions significantly increase total available support for domestic production
--> Part of a broader industrial policy stack: When combined with the CHIPS and Science Act and the Inflation Reduction Act, these provisions layer tax incentives on top of direct subsidies and sector-specific programs
Tax Policy Reforms
Tax Reform
Tax Policy Reforms
Since January 2025, federal tax reform impacting U.S. industry has been driven primarily by the passage of H.R.1 – the One Big Beautiful Bill Act, signed into law on July 4, 2025. The legislation builds on the Tax Cuts and Jobs Act (TCJA) and introduces targeted changes aimed at improving capital investment, financing, and domestic production economics. Below are key tax reforms since January 2025.
Full Expensing for Capital Investment (Expanded and Extended)
→ 100% bonus depreciation restored for qualified machinery, equipment, and short-lived assets
→ Section 168(n) introduces expensing for Qualified Production Property (QPP), including new facilities and major production-related improvements
→ Construction must begin before December 31, 2028, and assets must be placed in service before January 1, 2031
Immediate R&D Expensing (Restored)
-> Reinstates full deduction of domestic R&D expenses in the year incurred, reversing the prior amortization requirement
EBITDA-Based Interest Deductibility (Restored)
→ Returns interest deductibility to an EBITDA basis, increasing allowable deductions for capital-intensive businesses
Corporate and Pass-Through Tax Treatment (Stabilized)
→ Maintains the 21% corporate tax rate
→ Extends Section 199A pass-through deduction beyond its original 2025 sunset
International Tax Adjustments (Modified, Not Replaced)
→ Retains and adjusts FDII, GILTI, and BEAT provisions
→ Changes aimed at reducing incentives for profit shifting and supporting domestic investment
Estate Tax Exemption (Extended)
→ Maintains elevated exemption levels established under TCJA, reducing estate tax exposure for closely held businesses
What This Means for U.S. Industry
→ Greater investment certainty
Key TCJA provisions are extended or stabilized, reducing policy risk
→ Improved capital deployment economics
Expensing provisions significantly lower the after-tax cost of equipment, facilities, and automation
→ Stronger balance sheet flexibility
Interest deductibility changes increase financing capacity for expansion
→ Continued emphasis on domestic production
Tax structure increasingly favors U.S.-based investment over offshore alternatives
Regulatory Reforms
Regulatory Reforms
Regulatory Reforms
Following the passage of H.R.1 and the start of President Trump’s second term, federal regulatory posture has shifted toward reduced enforcement, streamlined permitting, and lower compliance burden across several areas impacting U.S. manufacturers and distributors.
Key Regulatory Developments
Labor Classification: DOL Halts Enforcement of Independent Contractor Rule
→ In May 2025, the U.S. Department of Labor announced it will not enforce the 2024 independent contractor rule under the Fair Labor Standards Act (FLSA)
→ Reduces near-term federal enforcement risk for companies using 1099 labor
→ The rule itself remains in place and can still be enforced through private litigation or state-level action
Federal Contractor Compliance: Affirmative Action Enforcement Rolled Back
-> The administration rescinded enforcement of affirmative action requirements tied to federal contracting under prior executive authority
→ Reduces compliance obligations for manufacturers and logistics companies operating as federal contractors
Corporate Reporting: Climate Disclosure Requirements Withdrawn
→ The administration has paused or withdrawn several proposed federal disclosure requirements, including climate-related reporting tied to federal contracting
→ Reduces anticipated compliance burden, particularly for small and mid-sized manufacturers
→ Existing statutory requirements, including those under the Corporate Transparency Act, remain in effect
Energy & Environmental Policy: EPA Rescinds Endangerment Finding
→ In February 2026, the EPA finalized rescission of the EPA Endangerment Finding, which previously served as the legal foundation for federal greenhouse gas regulation
→ Signals a major shift in federal environmental regulatory authority affecting industrial emissions and energy policy
Permitting & Industrial Development: Federal Acceleration Efforts
→ Federal actions have prioritized faster permitting and reduced regulatory friction for domestic energy, critical minerals, and pharmaceutical manufacturing projects
→ Includes efforts to streamline approvals, increase project visibility, and coordinate review timelines
Implications for Manufacturers and Distributors
→ Increased labor flexibility (with caveats)
Reduced federal enforcement pressure makes it easier to utilize independent contractors, though legal risk is not fully eliminated
→ Faster project timelines
Permitting and coordination changes may accelerate timelines for new facilities and industrial expansion
→ Shifting regulatory baseline for energy and emissions
Changes to environmental policy may alter long-term operating cost structures, particularly in energy-intensive industries
What This Means for Your Operation
Policy changes are starting to show up in day-to-day operations. Input costs are shifting, supply chain decisions are being reshaped, and capital investment is being pulled forward under new conditions. At the same time, demand variability and labor challenges have not gone away.
Most operations are not structured to adjust to this quickly. The challenge is not setting direction, but maintaining consistent execution as conditions change. That requires the ability to adjust capacity, manage labor costs, and maintain throughput without adding unnecessary fixed cost.
The companies that perform well in this environment will be those that can respond to change without overcommitting resources or disrupting operations. Veryable supports this by enabling businesses to build a flexible labor pool that can scale with demand, absorb variability, and maintain execution without relying solely on fixed headcount. Learn more -->
U.S. Manufacturing Today Podcast
Hosted by Veryable’s Head of Reindustrialization & Growth Innovation Matt Horine, the U.S. Manufacturing Today Podcast explores the economic, policy, and operational forces reshaping the U.S. industrial base.
Each episode examines the trends driving America’s reindustrialization, from trade policy and tariffs to supply chain realignment and domestic production investment. The show features conversations with manufacturing leaders and operations professionals navigating these shifts in real time.
New episodes are released every Tuesday at 6 AM CST. Listen on Apple Podcasts, Pocket Casts, Spotify, and YouTube.
Thought Leadership Blog
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Looking For Specific Guidance?
Amidst policy changes, uncertainty is inevitable. If you need further guidance or have any questions on any of these topics, we've got you covered - our team has over a century of combined experience in the manufacturing and distribution sectors.