In a 6-3 decision issued on February 20, the US Supreme Court invalidated President Donald Trump’s use of the International Emergency Economic Powers Act to impose broad reciprocal tariffs in 2025, ruling that the statute does not authorize the executive branch to levy duties on imports.
Writing for the Court, Chief Justice John Roberts said that IEEPA does not give the president authority to impose tariffs. “In fulfilling that role, we hold that IEEPA does not authorize the President to impose tariffs.”
Roberts emphasized that “[t]The power to impose tariffs is “very clear”.[ly] . . . a branch of the fiscal power’”, which the US Constitution assigns to Congress.
The Court rejected the administration’s reading of the IEEPA as allowing tariffs under its authority to “regulate” importation, warning that such an interpretation would allow the president to impose tariffs “of unlimited amount and duration, on any product of any country,” whenever a national emergency is declared.
The ruling dismantles a central pillar of the administration’s 2025 trade regime. According to Yale’s Budget Lab, roughly $142 billion was raised in 2025 under the IEEPA’s authority.
The Court affirmed the judgment of the United States Court of Appeals for the Federal Circuit and reversed the judgment of the District Court of DC, remanding the case with instructions to dismiss for lack of jurisdiction.
Majority: Congress controls the tariff power
Roberts’ opinion centers on a constitutional premise: Congress, not the president, controls the power to impose duties unless it clearly delegates that authority.
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The Constitution gives Congress authority to “lay and collect taxes, imposts, imposts, and excises.” The opinion emphasizes that the tariff authority is part of this fiscal power.
When Congress purports to authorize the president to impose duties or tariffs, the Court noted, it does so expressly. IEEPA contains no reference to “tariffs” or “duties”.
In a separate opinion for the majority, Justice Elena Kagan wrote that “The President has the ability to regulate, but not tax, imports,” explaining that Congress distinguishes between regulatory and revenue-raising authority.
The Court based its decision on statutory interpretation rather than the doctrine of “principal questions,” a judicial principle that requires clear authorization from Congress before the executive branch can exercise powers of great economic and political importance. Although the tariffs had radical economic consequences, most were not based on this doctrine. Instead, he focused on the text and structure of the IEEPA.
The opinion declined to create a foreign affairs exception to ordinary statutory principles of interpretation, concluding that Congress does not cede basic taxing powers through broad or ambiguous language.
Dissent: emergency authority and import regulation
Justice Brett Kavanaugh, writing in dissent, argued that the IEEPA’s authorization for the president to “regulate … importation” during national emergencies includes the power to impose tariffs.
In his view, the majority adopted an unduly narrow reading of the statute and failed to take into account the breadth of authority Congress intended to confer in emergency situations.
Kavanaugh also directly addressed the major issues doctrine. Although the doctrine requires clear authorization from Congress before the executive branch can exercise powers of major economic and political importance, Kavanaugh wrote that it should not be applied in the foreign affairs context, noting that six justices would not apply it in that setting.
He argued that ordinary statutory interpretation, not a heightened clear statement rule, should govern emergency commercial authority.
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Returns, liquidation and International Trade Court
Although the Court invalidated the IEEPA fees, it did not specify how refunds of fees already paid should be administered.
Under US trade law, disputes over duties assessed by Customs and Border Protection fall within the jurisdiction of the US Court of International Trade. Whether importers recover the duties paid in 2025 may depend on the procedural stance and how the trade court structures the relief.
A key concept is liquidation. When CBP completes duties on an entry, that entry is liquidated. Once settlement occurs, importers generally have a limited period to file a protest. If no timely claim is filed, the settlement becomes final.
International trade lawyers at Squire Patton Boggs cautioned that “once settlement occurs, an importer generally cannot obtain a refund of duties,” stressing the importance of preserving duties while litigation remains pending.
Yale’s Budget Lab said the court did not rule out allowing importers to claim refunds, and a substantial portion of the revenue collected under IEEPA by 2025 is likely to be returned to affected parties, though the process remains uncertain.
Contractors, however, should not assume that there will be retroactive cost reduction. “We have long warned our members that they are unlikely to see any refunds for materials purchased over the past year,” Brian Turmail, AGC’s vice president of marketing, communications, fundraising and market knowledge, told ENR in an email.
For contractors and suppliers, this uncertainty means that fee costs built into the 2025 bids may remain even if refunds are eventually issued.
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What authorities are left?
The ruling narrows a legal avenue, but does not completely eliminate the president’s tariff authority.
In a Feb. 20 client alert, Thompson Hine wrote that the decision “invalidates the President’s reliance on IEEPA as tariff-imposing authority,” but stressed that it “does not disturb tariffs imposed by other statutory authorities, including Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1967.”
The firm added that those statutes “contain distinct investigative and procedural frameworks that were not at issue in this litigation.”
Holland & Knight similarly emphasized the separation between IEEPA and other trade tools, writing that “Section 232 tariffs are a separate type of tariff from tariffs imposed through IEEPA” and that the court’s decision “does not directly affect those measures.”
Yale’s Budget Lab also noted that the administration retains the authority to seek fees under sections 201, 232 or 301, or to temporarily invoke section 122, which allows fees of up to 15 percent for 150 days without investigation.
Over time, expanded investigations under these statutes could build a tariff regime roughly as large as the one dismantled by the Court.
Construction exposure and industry reaction
Without the IEEPA tariffs, the overall effective tariff rate is expected to decline, but remains historically high.
The Budget Lab projects short-term consumer prices to rise 0.6%, representing roughly $800 per household in 2025 dollars, and models long-term GDP 0.1% smaller under the remaining tariff structure. Construction output contracted by 2.4% in the long run, even without IEEPA rates.
Section 232 tariffs on steel and aluminum remain in place, preserving exposure to rebar, structural plate, fabricated steel, curtain wall systems, heavy equipment, and building system components.
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ENR reported in 2018 that Section 232 tariffs caused double-digit swings in structural steel prices, complicating procurement schedules and escalation clauses for energy and transportation megaprojects. Similar volatility resurfaced during renewed trading actions in 2025.
Associated Builders and Contractors chief economist Anirban Basu said the ruling could ease pressure on finished component prices.
“Now that the US Supreme Court has struck down the IEEPA tariffs, the construction industry could see a modest but significant reduction in material price escalation, specifically for manufactured components such as specialty equipment, HVAC and electrical systems and fixtures,” Basu said in an email to ENR.
But he warned that the relief may be temporary.
“Of course, the administration has indicated that there are plans to replace at least some of these tariffs by other means, so the benefits could be short-lived and completely offset by increased uncertainty during the transition from one tariff mechanism to another,” Basu said.
“This, combined with the fact that Section 232 tariffs on raw materials like steel and aluminum will remain in place, means that this Supreme Court ruling could ultimately be less consequential for the construction industry,” he added.
AGC’s Turmail said that unless new tariffs are imposed under another legal reason, “contractors should expect to see some relief in materials costs in the near term,” although long-term prices will depend on how the administration restructures its trade program.
