The U.S. Supreme Court’s 6–3 decision in Learning Resources, Inc. v. Trump did what many expected: it held that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose tariffs. What few anticipated was the speed of what followed: within hours of the ruling, the administration announced replacement tariffs under Section 122 of the Trade Act of 1974, imposed a 10 percent global surcharge effective February 24, and signaled forthcoming Section 301 investigations against most major trading partners. For those in the construction industry hoping the Learning Resources ruling would restore market stability, the message was unambiguous. The constitutional question may be settled, but the market disruption is not.
A Constitutional Boundary, Not a Market Correction.
The Court’s holding is significant. Writing for the six-justice majority, Chief Justice Roberts concluded that IEEPA’s grant of authority to “regulate … importation” does not include the power to impose tariffs—emphasizing that the statute contains no reference to tariffs or duties, that no President has read IEEPA to confer such power in the statute’s nearly fifty-year history, and that Congress has consistently used explicit language when delegating tariff authority. In a plurality portion joined only by Justices Gorsuch and Barrett, Roberts went further, invoking the major questions doctrine to underscore that Congress must clearly authorize delegations of authority involving “economic and political significance,” particularly where the claimed power implicates a core congressional prerogative under Article I. The decision invalidated every tariff imposed under IEEPA since early 2025, including the reciprocal tariffs on virtually all trading partners and the country-specific duties on Canada, Mexico, and China that contributed to cost escalations for imported steel, aluminum, lumber, and equipment for the better part of a year. Notably, Justice Kavanaugh, joined by Justices Thomas and Alito, dissented, warning that the process of securing refunds for previously paid IEEPA tariffs will be a “mess.”
Most significantly for the construction market marketplace, the ruling was limited to tariffs imposed under IEEPA’s now-invalidated tariff authority and, therefore, left the executive branch room to explore other pathways for the imposition of tariffs. For example, Section 232 tariffs on steel and aluminum—now at 50 percent—remain untouched. Section 301 tariffs are unaffected by the ruling. And the administration’s new Section 122 surcharge—set at 10 percent in a signed proclamation, with the President announcing via social media his intent to raise the rate to the statutory maximum of 15 percent—applies broadly to imports from all countries not already covered by Section 232 or qualifying under the USMCA. For construction firms, tariff driven market disruption and volatility will likely remain.
Brief Relief, Then Reality
In the hours after the Learning Resources opinion was delivered, a cautious optimism swept through the marketplace. That sentiment faded quickly, however, as industry associations, like the Associated Builders and Contractors, projected modest reductions in prices for specialty equipment, HVAC systems, and electrical components—but acknowledged that the structural cost pressures on core materials are likely to be materially unchanged.
The practical reality for the construction industry is that pricing is less affected by whether a tariff is technically lawful under one authority or another, and is far more affected by whether pricing is stable. Stability is likely to remain elusive, as recent patterns of tariff announcement, adjustment, and readjustment show no sign of ending.
The Refund Question
One of the most consequential aspects of the ruling is found in its silence: the opinion did not address whether importers are entitled to refunds for tariffs previously paid under IEEPA and, if so, how the refund process will be administered. By most estimates, the federal government collected upwards of $160 billion in IEEPA duties over the past year. Approximately 2,000 importers have already filed suit with the Court of International Trade to preserve their refund claims. That litigation is just beginning and is likely to extend for months, if not years.
For the construction industry, the refund issue is uniquely complex because the party that paid the tariff at the border is likely to own the refund claim, but the cost implications of the tariffs flowed throughout the market as the costs of construction inputs were adjusted to reflect the market disruptions. Refunds, if they are ever to be issued, will flow to importers of record, with the consumers of wrongfully tariffed inputs likely excluded from cost recoveries.
Whether an importer has any obligation to pass tariff recoveries back through the supply chain will likely depend on each participant’s contracts, and many of those agreements were never drafted with retroactive tariff relief in mind. Disputes at every tier of the supply chain should be expected.
What Now?
The question construction professionals should be asking is not whether IEEPA supports tariffs. The Court answered that question definitively: it does not. The question is whether tariffs will continue to be deployed as a primary policy instrument of the executive branch, and the administration’s response to the Learning Resources opinion leaves no room for doubt on this important question. Tariffs and market disruptions are here to stay for the foreseeable future. Almost immediately after the Learning Resources opinion was rendered, U.S. Trade Representative Jamieson Greer announced that Section 301 investigations will be initiated “in short order” against most major trading partners. Multiple Section 232 investigations are already pending. And if those actions evolve into new tariffs, market volatility can be expected to continue.
There was some hope that a Supreme Court ruling would bring clarity and reduce tension in the marketplace. Constitutionally, the Court drew a bright line and rejected one of the broadest assertions of unilateral executive trade authority in modern history. The Learning Resources decision will have historical resonance for its reaffirmation of the separation of powers among coequal branches of government. Economically, however, the import markets will remain unsettled and the cost structure for construction inputs has not fundamentally changed.
The industry should proceed on the assumption that new tariffs will be announced with limited notice, that legal challenges will take time to work through the courts, and that alternative tariff strategies will follow adverse rulings, as the administration seeks to preserve one of its most favored policy tools. Even after tariffs are lifted, as in the Learning Resources case, refund litigation could persist for years, extending uncertainty well beyond the initial imposition of the tariff itself. This, however, does not mean that projects will stall or investment will be deterred. Markets adapt, as pricing models, financing structures, and contracting adjust to reflect the reality of the marketplace. The Court resolved an important constitutional question. It did not bring an end to tariff-driven market disruption.
SEE ALSO: CONSTRUCTION MATERIALS PRICES SURGE AGAIN IN JANUARY, DRIVEN AGAIN BY TARIFFS
The post Supreme Court Rules Tariffs Unconstitutional: Why The Construction Industry Shouldn’t Expect Calm Just Yet first appeared on Construction Executive.
