Introduction

On February 20, 2026, the U.S. Supreme Court delivered a 6-3 rebuke to the Trump administration, ruling that its sweeping tariff policy, implemented under the International Emergency Economic Powers Act, lacked legal authority and was thus invalid.

The news triggered a surge in U.S. stocks, with importers, previously stifled by tariffs, catching a glimmer of hope.

However, before autonomous driving industry practitioners could celebrate, they realized the situation was far more complex—

Before the ink on the ruling had even dried, Trump stood at a press conference and declared: “I’ll change the laws and keep imposing tariffs.”

Let’s delve deeper into this with Self-Driving Cars Are Coming (WeChat Official Account: Self-Driving Cars Are Coming)!

(For reference, please click: Tesla’s First Cybercab Rolls Off the Line, But Musk’s ‘Self-Driving Taxi’ Myth Crumbles: Only 42 Vehicles Activated in 8 Months, 19% Availability, 9x Accident Rate—Still Daring to Promise 2 Million?)

I. The Tariff Sledgehammer Falls: Will the ‘Domino Effect’ Topple the Autonomous Vehicle Supply Chain?

When the U.S. Supreme Court handed down its decision, the hundreds of billions of dollars in tariffs Trump had imposed on countries worldwide since 2025 were declared unlawful. Autonomous vehicle industry practitioners may have breathed a quiet sigh of relief.

This tariff war, waged since Trump took office and lasting a year, had become a crushing burden for autonomous vehicle companies.

Take LiDAR, for example—the “eyes” of autonomous vehicles. Chinese companies command nearly 70% of the global market share. Trump’s 25% tariffs directly increased the cost of each imported LiDAR unit by thousands of dollars.

Waymo publicly lamented that tariffs had raised its manufacturing costs by over 10%, forcing delays in its planned “mass production” of autonomous vehicles.

Traditional automakers like Ford and General Motors also felt the pinch. Over 60% of the sensors in their autonomous vehicle test fleets came from China, with tariffs adding more than $20,000 to the testing cost per vehicle.

Now, with tariffs overturned, cost pressures on autonomous vehicle companies will ease significantly.

JPMorgan analysts predict that if tariffs are fully eliminated, overall costs in the U.S. autonomous vehicle industry could drop by 15%-20%, potentially accelerating profitability for companies like Waymo and Cruise by 2-3 years.

For an industry at a critical commercialization juncture, this is undoubtedly a “timely rain.”

II. Supply Chain Restructuring Accelerates: Will the ‘China Dependency’ of Autonomous Vehicle Companies Be Cured?

However, the removal of tariffs does not mean autonomous vehicle companies can rest easy.

This tariff war has awakened U.S. companies to the importance of supply chain security, prompting many to pursue “de-Sinicization.”

Waymo announced in 2022 that it would collaborate with U.S. firms to develop LiDAR, aiming for 100% domestic supply by 2025. Ford invested $120 million to establish a sensor R&D center in Michigan.

But the reality is that China’s role in the autonomous vehicle supply chain is hard to displace in the short term.

Beyond LiDAR, Chinese companies dominate shares in chips, cameras, and millimeter-wave radar.

For instance, Chinese firms hold over 40% of the market for AI chips commonly used in autonomous vehicles and more than 60% for camera modules.

These products are not only cheaper but also meet quality demands. U.S. companies seeking complete independence from Chinese supply chains would need at least 5-10 years and face soaring costs.

The Supreme Court’s ruling may slow some companies’ “de-Sinicization” efforts.

After all, when cost pressures loom, supply chain security seems less urgent. But in the long run, the U.S. will likely continue pushing for supply chain localization, requiring autonomous vehicle companies to balance cost and security.

Perhaps a diversified supply chain model—“China + Southeast Asia + U.S.”—will become the future norm.

Additionally, the tariff system may be overhauled, introducing new dynamics to the autonomous vehicle supply chain.

In the future, Waymo’s expansion to Tokyo, Tesla’s factory in Berlin, and Cruise’s growth in Dubai will all hinge on negotiations over tariffs and trade agreements.

With a crack now appearing in the U.S. tariff system, all expansion plans factoring in “tariff costs” must be recalculated.

III. Global Competition Shifts: Will the ‘Second Half’ of Autonomous Vehicles Be Even More Exciting?

The removal of tariffs will impact not just U.S. companies but also reshape global competition in the autonomous vehicle industry.

For Chinese companies, this means lower barriers to entering the U.S. market.

DJI, RoboSense, and others have long eyed the U.S. market, but tariffs eroded their price advantage. Now, with tariffs gone, they can more easily establish a presence and compete directly with Waymo, Cruise, and Tesla.

This could spark a “price war.”

Chinese products typically cost 30%-50% less than U.S. counterparts. If they flood the U.S. market, American firms may be forced to cut prices, driving down costs across the industry.

For consumers, this is welcome news, potentially accelerating autonomous vehicle adoption.

But competition will intensify.

U.S. firms like Waymo and Cruise hold advantages in technology and data, while Chinese companies excel in cost and supply chains. Future competition may shift from a “technology race” to a “comprehensive strength contest,” where dominance in technology, cost, and supply chains determines the winner.

However, the autonomous vehicle industry shouldn’t celebrate too soon!

Trump’s reaction on the day of the ruling confirmed this. While denouncing the decision as “shameful,” he swiftly announced a backup plan:

Under Section 122 of the Trade Act of 1974, a 10% global tariff on imported goods would be imposed for 150 days.

This suggests tariffs, as a policy tool, will not disappear but merely evolve.

For the autonomous driving industry, core components—whether LiDAR, millimeter-wave radar, high-performance chips, or precision sensors—remain vulnerable to 25% tariffs if classified as “critical automotive parts.”

In summary, Self-Driving Cars Are Coming (WeChat Official Account: Self-Driving Cars Are Coming) argues:

The Supreme Court’s ruling marks a pivotal moment for the autonomous vehicle industry. It will lower costs, accelerate commercialization, and reshape global competition.

But Trump’s countermeasures leave the trajectory uncertain.

One certainty remains: The first half of autonomous driving was a battle of algorithms; the second half will be a battle of supply chains. The winner will be whoever navigates the tariff labyrinth most efficiently.