US Corporates Face Renewed Tariff Uncertainty Despite Temporary Respite in World Economy News 26/02/2026 The U.S. Supreme Court decision that invalidated tariffs imposed under the International Emergency Economic Powers Act (IEEPA) may provide temporary relief to some U.S. corporates. However, renewed uncertainty around the trade regime could outweigh the benefits, increasing operational complexity and complicate business decisions, says Fitch Ratings. While the decision itself cuts the US effective tariff rate (ETR) by roughly half, the Trump administration quickly announced a replacement global tariff under Section 122 of the Trade Act of 1974—initially 10% and subsequently raised to 15%. The new US ETR would settle at round 11.5% versus the pre-Supreme Court ruling of 12.7% assuming the same exemptions that applied to IEEPA tariffs also apply to the new 15% blanket tariff. The ruling and replacement tariff also introduces new uncertainties. Corporates will need clarity on whether the government will refund previously collected IEEPA tariffs, what will replace the Section 122 tariffs after the 150-day window, and whether exemptions under the prior IEEPA program will carry over. Tariff volatility has created a significant hurdle for high-yield issuers already contending with elevated interest burdens, and rising input costs, pricing-related volume declines, and supply-chain issues tied to tariffs. Fitch estimates that tariffs directly or indirectly affect about 30% of issuers on our Top Market Concerns Loan List and 34% on our Top Market Concerns Bond List, underscoring the relevance of trade policy to near-term credit outcomes and default rates. Smaller and mid-market companies, including issuers in Fitch’s private monitored rating (PMR) portfolio, are particularly sensitive to trade policies, as their pricing power and supply-chain leverage are often constrained by competition, limited scale, and less diversified business models. In this segment, the benefit of any tariff relief may be overshadowed by renewed trade regime uncertainty and potential cost shocks. These pressures could weaken operating stability and tighten liquidity. Among investment-grade issuers, the automotive sector faces the highest trade-policy exposure, given a highly integrated North American supply chain. However, the Supreme Court ruling has limited impact on the sector because most auto-related tariffs were imposed under Section 232, not IEEPA. Tariff changes since 2025 have increased costs and production inefficiencies for the auto industry. The Trump administration has also signaled its willingness to work with the industry to reduce tariff effects on original equipment manufacturers (OEMs) that assemble vehicles in the U.S. This approach could lead to targeted relief that is formalized or expanded through the upcoming USMCA renewal negotiations, even as broader trade-policy uncertainty remains elevated. Fitch’s 2026 sector outlook for North American corporates is ‘neutral’, underpinned by our expectation of modest improvement in 2026 credit metrics. Across our rated portfolio, we expect an improvement in FCF and stable to slightly lower leverage, supported by stabilizing, but still weak, economic growth and declining interest rates. Fitch has ‘deteriorating’ outlooks for four of 30 sectors this year – automotive, chemicals, retail/restaurants and global shipping. These sectors face demand headwinds from pricing actions that partly offset higher tariffs and