Impact of the Supreme Court’s Tariff Ruling on Construction: Will It Impact Your Bottom Line?

Recently the United States Supreme Court, in a 6-3 ruling, issued its decision striking down the use of the International Emergency Powers Act (“IEEPA”) to impose broad tariffs impacting many industries, including construction.  While the ruling removes a major set of emergency related tariffs, its impact on the construction industry may appear more nuanced at first glance.

What Changed

The Court ruled that the government could not legally utilize the IEEPA to impose tariffs through emergency powers, invalidating a wide range of duties imposed throughout 2025 on imports from various countries, many of which impacted construction related materials.

Impact of the Ruling on the Construction Industry

Shortly after the issuance of the ruling, the White House issued its backup plan, replacement tariffs under a different law, Section 122 of the Trade Act of 1974 which allows the President to address certain international payment problems through surcharges and other import restrictions for a period of 150 days.  Additionally, there are other pre-existing tariffs imposed under Section 232 of the Trade Expansion Act of 1962 which do not appear to be impacted by this recent Ruling, many of which impact construction related materials such as steel, aluminum, and cabinets.  Taken together, the impacts of the Supreme Court decision could be short lived. 

Regardless of whether your project was impacted by tariffs, the continued uncertainty as to how this Ruling may impact material costs will likely lead to volatility in material prices for the near future and a dramatic decrease in impacted material costs is unlikely in the near term.  Finally, parties must continue to be diligent when negotiating their construction contracts in this period of uncertainty.  Attention must be given to how tariff related costs are passed through amongst the parties, and given the recent Ruling, how costs, which may have been charged, are to be refunded.    

For more information, or to discuss any of these topics, please contact Pat Johnson, a member of Honigman’s Development and Regulated Real Estate Practice Group.