The U.S. Court of Appeals ruled 7-4 on Aug. 30 that President Donald Trump overstepped his authority when implementing sweeping tariffs, though the decision offers no relief for roofing companies in the short term.

The ruling upholds a decision made by a New York federal trade judge in May, which stated that Trump’s declaration of a national emergency and imposing tariffs on nearly every country usurped Congress’ authority to set tariffs.

The decision does not immediately strike down the affected tariffs, instead setting an expiration date of Oct. 14. This gives the Trump administration time to appeal to the Supreme Court. The continuation of the tariffs means there will be little reprieve for the roofing industry seeking stable pricing, especially as steel and aluminum tariffs are not only unaffected by the ruling but may expand once again.

“Nonresidential construction spending fell for a third consecutive month in July and is now down 2.5% from the December 2023 record high,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Of course, that’s in nominal terms. With construction materials prices rising rapidly in recent months and set to continue as higher tariff rates go into effect, the recent decline in construction activity is even larger than this data series suggests.”

QUICK READ: WHAT THIS MEANS FOR CONTRACTORS

• Broad Tariffs Struck Down –
  The court invalidated Trump’s “Liberation Day” tariffs, ruling they exceeded presidential authority. This may eliminate import duties that drove up material costs for contractors.
• No Immediate Relief – The tariffs remain in effect until at least Oct. 14, and steel/aluminum tariffs are untouched and may even expand.
• Prices Stay Volatile – Expect continued cost fluctuations for roofing materials, especially steel products, fasteners, and equipment.
• Plan Ahead – Lock in pricing where possible, talk with distributors about alternative sourcing, and factor in tariff-related costs when bidding projects.
• Legal Uncertainty – The case is likely heading to the Supreme Court. Trade policy volatility is expected to continue.

Trump took to Truth Social to criticize the appeals court and its decision, saying the tariffs are the best tool to help workers and support companies that produce American-made products.

“If allowed to stand, this Decision would literally destroy the United States of America,” Trump said.

Emergency Tariffs?

The dispute over the tariffs arose from legal challenges brought by businesses and Democratic states, which claimed that Trump had exceeded his presidential powers in implementing his “Liberation Day” tariffs. Introduced April 2, those consisted of so-called “reciprocal” tariffs of up to 50% on countries that ran trade deficits with the U.S.

Trump used the 1977 International Emergency Economic Powers Act to impose tariffs, saying the longstanding trade deficits were a “national emergency.” He also placed tariffs on Canada, Mexico and China, saying the countries needed to do more to stop illegal drug trafficking into the U.S.

The Constitution delegates the power to set taxes to Congress, which includes tariffs. Over the years, Congress gave the president more power over tariffs. However, the federal judges noted while the president has significant authority to take several actions in response to a declared national emergency, none of these actions specifically permit imposing tariffs or duties.

“It seems unlikely that Congress intended, in enacting IEEPA, to depart from its past practice and grant the president unlimited authority to impose tariffs,” the ruling said.

Which Tariffs are Affected?

The ruling applies to the “Liberation Day” reciprocal tariffs, along with the baseline 10% set on more than 60 countries trading with the U.S., that went into effect in early August. The drug-related tariffs levied against China, Mexico and Canada were also deemed illegal.

The ruling will not impact Section 232 tariffs, such as those on steel and aluminum. The Department of Commerce said those 50% tariffs recently expanded to more than 400 additional product categories.

RELATED: Labor Shortages Mount Under Tariffs, Immigration Crackdown

According to the Wall Street Journal, the Trump administration plans to expand national-security tariffs on steel and aluminum. The roofing industry has felt the sting of these tariffs, raising prices for everything from metal roofing components to fasteners.

“Nearly one in four ABC members reported having a project interrupted or canceled due to tariffs in July, according to ABC’s Construction Backlog Indicator survey, and that predates the particularly large import tax increases put into effect in early August,” said Basu. “With economic uncertainty still elevated, labor shortages reemerging and materials prices rising, it may be a bleak second half of the year for the construction industry.”

The court’s decision doesn’t affect tariffs issued against China by Trump in his first term and those placed by former President Joe Biden.

What Happens Next?

Until the Supreme Court weighs in, the roofing industry will continue to be affected by the tariffs through price hikes, delayed jobs and supply shortages.

The government has said that if the ruling is upheld, it will have to issue refunds on some import taxes it collected. Tariff taxes are paid by U.S. companies that import goods from the countries affected by tariffs. Treasury Department data shows $141 billion has been collected in tariff revenue this fiscal year.

The Trump administration will likely appeal to the Supreme Court. U.S. Treasury Secretary Scott Bessent said on Monday that he believes the Supreme Court will uphold Trump’s use of emergency powers, but added the administration has a backup plan if that isn’t the case, according to Reuters.

There are other laws Trump could use to impose tariffs, but they would be much more limited in scope. Either way, the trade wars and the new normal of tariff volatility show no signs of stopping anytime soon.

“At a practical level, nothing is new today compared to this time last week. But we’re still seeing a flurry of questions indicating the ruling is creating internal questions for businesses,” Michael Lowell, partner and chair of the global regulatory enforcement group for Reed Smith, told CNBC.