February 24, 2026
On February 20, 2026, the Supreme Court ruled that the federal government could not use the International Emergency Economic Powers Act (IEEPA) to impose tariffs. The 6-3 decision invalidates the tariffs that took effect in early 2025 under that law. The decision applies only to tariffs created under IEEPA. It does not change tariffs enacted under other statutes, including those on many building materials. Construction companies still face those costs. To help clients, prospects, and others, Wilson Lewis has summarized the key details below.
By blocking the use of IEEPA for tariffs, the Court made many of Trump’s tariffs invalid under federal law. Those tariffs fell into two main groups. The first group took effect in February 2025 and targeted imports from Canada, Mexico, and China. The second group were the “reciprocal” tariffs announced on Liberation Day in April 2025; this set a 10% baseline tariff for most other trading partners.
After the decision, the administration said it is reviewing other legal tools to bring those tariffs back. Sections 122, 232, 301, and 338 are a few of the options being discussed. Analysts are still working out which of these paths could survive legal or procedural challenges.
Even so, several other major tariffs are still in place. Steel, aluminum, and copper are still subject to tariffs of 50%. Timber and lumber remain at 10%. Cabinets and vanities, heavy duty trucks, and certain semiconductors and chipmaking equipment also remain under higher tariff rates.
These tariffs continue to influence the cost of construction projects. As long as they remain in effect, contractors should not expect broad cuts in overall project costs, even though the IEEPA tariffs have been removed.
The impact on the construction industry is mixed.
Some contractors may see limited cost relief. Products that were subject only to the IEEPA tariffs may become less expensive once new shipments arrive without those duties. The timing will depend on supplier inventories and how quickly distributors change prices. Any savings are likely to show up in specific items, not across entire material packages.
There are still tariffs on key materials. Tariffs on steel, aluminum, copper, and lumber are unchanged. These materials drive a large share of costs in structural, mechanical, and framing work. The Associated General Contractors (AGC) of America has noted that these tariffs will continue to influence bids and budgets. For most contractors, the ruling does not change the pricing picture for steel, major electrical components, or large equipment.
Uncertainty has increased. The administration is looking at new tariff options, and economists have warned that any price relief could be temporary. One sign of how quickly things are changing came right after the decision, when across-the-board tariffs were announced at 10% and may reach 15%, the maximum allowed under Section 122 without congressional approval.
On the ground, that uncertainty shows up in day-to-day decisions. Suppliers may shorten how long quotes stay valid or hold off on pricing. Contractors may need to update assumptions more often as they price new work. Owners may delay budgets or project start dates until they have a better idea of long-term material costs. These factors can slow pre-construction and extend the time it takes to move projects forward.
Refunds are possible, but contractors should keep expectations low.
Customs and Border Protection (CBP) already has a process to refund duties when an importer can show that an error occurred. The agency could use this system, or expand it, to handle refund claims tied to the IEEPA tariffs. There is a precedent. In the 1990s, when courts struck down a harbor maintenance fee on exports, a refund program was set up for affected exporters.
This time, about $175 billion was collected under IEEPA. Analysts have said that if refunds move forward, the process could take 12 to 18 months or longer. The AGC has advised contractors not to count on refund checks.
There is another important point. Refunds generally go to the importer of record. In many cases, that is a supplier or distributor, not the contractor. Even if refunds are paid, the money may not flow directly to the job unless contracts or purchase agreements explain how refunds will be handled. Contractors can keep records, but they should not build possible refunds into short-term budgets or cash flow.
Contractors can take several steps now to manage risk.
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The Supreme Court ruling ends the IEEPA tariffs, but it does not eliminate tariff exposure for construction companies. Most major construction inputs are still under existing tariffs, and new policies may be introduced. Taking time to understand the changes and watch for any new developments will better prepare contractors for the months ahead. If you have questions about the information outlined above or need assistance with another tax or accounting issue, Wilson Lewis can help. For additional information call 770-476-1004 or click here to contact us. We look forward to speaking with you soon.