Market unfazed by US circuit court’s IEEPA decision  

The Trump administration rolled out a series of country-specific “reciprocal” tariffs in April 2025. The president stated that the International Emergency Economic Powers Act (IEEPA) granted the him authority to enact the tariffs without Congress’s approval. The IEEPA tariffs form a separate set of tariffs. They differ from the Section 232 protections on steel and aluminum. On Aug. 29, the US Circuit Court ruled that the president didn’t have the legal authority to enact the reciprocal tariffs via IEEPA.  

The circuit court decision didn’t raise many eyebrows in the steel market, as Section 232 provisions place tariffs on foreign steel imports. Electric-arc furnace (EAF) steelmaking uses scrap together with raw materials such as DRI, HBI, iron ore, and pig iron. The president placed those inputs under IEEPA tariff exposure until the country of origin reached a “deal” with him.

Market impact

In July, the president carved out an exemption on the tariff’s application to pig iron and iron ore from Brazil. Other supplier countries provide less input materials to the US and confusion about what will happen to those suppliers persists. The 2018 US-Mexico-Canada Agreement (USMCA) granted Canada and Mexico product exemptions that protect the iron input materials from IEEPA. The agreement took effect in 2020.

As of Sept. 5, the only carve-out for IEEPA tariffs on the inputs is for Brazil. Market sources contend that the overall domestic US steel market has little skin in the game regarding the court’s recent decisions. 

Sources said the court’s ultimate decision creates only a nominal impact for the steel market. As long as Brazil’s carve-out is maintained and Section 232 tariffs are unchanged, little impact is expected.