In March, when we published “Farewell to an Idea,” the gear industry was bracing for the full weight of Section 232 tariffs—25 percent on steel and aluminum, no more exclusion process, no more relief valves. The Supreme Court case challenging the president’s broader IEEPA tariffs was still months from oral argument. The question then was how to survive. The question now is different. On February 20, the Supreme Court ruled 6–3 in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act does not authorize the president to impose tariffs. The decision invalidated the sweeping “reciprocal” tariffs on nearly every U.S. trading partner, along with the fentanyl-related tariffs on China, Canada, and Mexico. The Court held that IEEPA’s authority to “regulate importation” does not include the power to tax. In dissent, Justice Kavanaugh predicted the ruling “might not substantially constrain a President’s ability to order tariffs going forward,” pointing to several alternative statutes. The administration proved him right within hours.

The New Tariff Stack As of February 24, CBP stopped collecting IEEPA tariffs. What remains—and what replaced them—defines the gear industry’s new cost structure. 

 Section 232 

The Section 232 tariffs on steel, aluminum, and copper are unchanged at 50 percent. Over 400 derivative product categories added in 2025 also remain in force. This is the tariff that dominates for gear manufacturers. Raw steel—billet, bar, rod, forging stock—and products classified in HTS Chapters 72 and 73 are assessed on total value. For derivative products classified outside those chapters, the tariff applies only to the steel or aluminum content, with the importer responsible for documenting that content. Critically for this industry: several HTS 8483 codes covering gear boxes, transmission shafts, gears, gearing, and gear parts were added to the Section 232 derivative list in August 2025. Imported gear products classified under those codes are subject to the tariff on their steel content. The exclusion process and all general approved exclusions remain revoked. 

 Section 122

Within hours of the ruling, President Trump imposed a global surcharge under Section 122 of the Trade Act of 1974, raised to the statutory maximum of 15 percent on February 22. It took effect February 24 and expires July 24, 2026. Section 122 does not stack on Section 232—products already fully covered by Section 232 are excluded. For derivative products where only part of the value falls under Section 232, Section 122 applies to the non-steel, non-aluminum portion. USMCA-qualifying goods from Canada and Mexico are also exempt. Section 301 Existing Section 301 duties on Chinese goods remain. The administration has announced new investigations that could produce additional country-specific tariffs, but those take months. What’s Gone The IEEPA reciprocal tariffs (10–34 percent on most countries, up to 145 percent on China), the fentanyl surcharges, and all country-specific escalations are struck down and terminated. For a gear manufacturer importing 20MnCr5 carburizing steel from Germany or 9310 aerospace-grade material from Japan, the IEEPA layer is eliminated. Section 232 on those steel imports remains.