Supreme Court Tariff Ruling: What Construction Leaders Should Do Next

Executive opening

On Friday, the Supreme Court fundamentally changed the tariff landscape.

But if you think tariffs are over, think again.

The Court shut down one pathway. The administration immediately pivoted to another and made it clear this will continue at full speed.

For construction leaders, this is not political. It is financial.

Here is what changed, what did not, and what to do next.

Executive summary

  • The Supreme Court ruled IEEPA does not authorize broad tariffs. One major tool is gone.
  • The administration pivoted immediately to a temporary import duty under Section 122 of the Trade Act of 1974.
  • Other tariff tools remain available, especially Section 232 and Section 301.
  • For construction, the biggest risk is volatility, not one single tariff rate.

What the Supreme Court actually ruled

In a 6-3 decision, the Supreme Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize the President to impose broad tariffs. In plain English, one fast, broad emergency pathway for tariffs has been constrained.

This does not mean tariffs are gone. It means the legal mechanism is changing, and the next steps will likely run through other authorities Congress already provided.

What changed immediately

The administration pivoted quickly to Section 122 of the Trade Act of 1974, a balance-of-payments provision that allows a temporary import surcharge.

The key practical point for construction leaders is simple:

The legal vehicle changed, tariff pressure did not disappear.

What stays in place no matter what

Many tariffs that matter to construction are not tied to IEEPA and are not automatically impacted by the ruling.

That includes:

  • Section 232 tariffs (national security), which have covered categories like steel and aluminum.
  • Section 301 tariffs (unfair trade practices), which can apply to targeted products and countries after investigation.

Bottom line: do not assume a clean pricing reset on core inputs.

What could happen next (the real playbook)

If the administration wants tariffs beyond the temporary Section 122 window, it has other pathways. The two that matter most for construction:

1. Section 232 (national security)
This is already in play for key inputs and could expand to additional categories if the administration frames them as national security concerns.

2. Section 301 (unfair trade practices)
This requires process, but it is a proven tool for targeted tariffs by product and country.

There are also slower mechanisms (Section 201 safeguards), but construction leaders should focus on what changes procurement, bidding, and long-lead schedules in the next 6 to 12 months.

Three scenarios for construction (next 6 to 12 months)

Scenario 1: Temporary stability, then targeted tariffs
The temporary surcharge buys time. Then targeted actions return under 232 and 301. Net result: tariffs remain, but move around.

Scenario 2: Targeted escalation hits building systems
Even if broad pressure moderates, targeted actions hit what matters most for projects: equipment, components, and specialty imports. This is where volatility becomes schedule risk.

Scenario 3: Policy whiplash
Shifts in authority, new actions, new challenges, revisions, and uncertainty. Owners hesitate. Buyouts get delayed. Decision velocity slows. In construction, this is often the most damaging scenario because it hits both schedule and margin.

What this means for construction (practical, not theoretical)

1. Volatility is now a line item.
You can price a known rate. You cannot price policy whiplash without contingency and clear language.

2. Exposure becomes scope-specific.
A flat temporary surcharge can lower some categories while raising others. Cost exposure will differ by package.

3. Long-lead equipment is where pain shows up first.
Electrical gear, specialty HVAC components, controls, and imported building systems are the packages most likely to turn volatility into schedule risk.

4. Contract language decides who eats it.
If your language is weak, you finance volatility. If your language is clear, you can manage it.

5. Owners respond to uncertainty by slowing decisions.
This is why communication is now a margin skill, not a soft skill.

The practical playbook (what to do this week)

Use this checklist:

  • Build a tariff exposure map: list your top 20 tariff-sensitive line items by spend and schedule criticality.
  • Assign an owner for each package: supplier, alternates, lead time, price validity window, and walk-away price.
  • Tighten proposal language: have escalation options ready (good, better, best) instead of negotiating after award.
  • Set a procurement rule: no major buyout without confirming tariff status and supplier pricing validity that week.
  • Communicate to owners in one sentence: pricing may move, we are protecting schedule and budget with clear assumptions and options.
  • Do not assume refunds or givebacks: treat retroactive relief as uncertain until confirmed through your contract posture and the importer record.

Leadership angle (our lane)

In 2026, the gap between good and great leadership gets wider.

Great leaders:

  • communicate risk without drama
  • lock procurement with discipline
  • keep decisions moving
  • protect margin through clarity

Average leaders:

  • react late
  • buy out without a plan
  • argue after the fact
  • let uncertainty become rework and delay

When the rules keep changing, leadership is the competitive advantage.

Bottom line

The Supreme Court ended one tariff pathway. It did not end tariff risk.

Plan for continued volatility and manage it like any other project risk:

name it, price it, and lead through it.

Not legal advice. For contract interpretation, consult counsel.

Sources