On Feb. 20, 2026, the U.S. Supreme Court ruled 6-3 that the International Emergency Economic Powers Act does not authorize the president to impose tariffs.

The court concluded that IEEPA does not reference tariff authority and emphasized that Congress has enacted separate statutes governing trade actions, including Section 232 of the Trade Expansion Act, and Sections 201 and Section 301 of the Trade Act of 1974. The majority also cited separation-of-powers principles and said that broad tariff authority requires clear congressional authorization.

“Now that the U.S. Supreme Court has overturned IEEPA tariffs, the construction industry could see a modest but meaningful reduction in materials price escalation, specifically for manufactured components like specialty equipment, HVAC and electrical systems, and fixtures,” said Anirban Basu, ABC chief economist. “Of course, the administration has signaled that plans are in place to replace at least some of those tariffs through other means, so the benefits could be short-lived and completely counteracted by heightened uncertainty during the transition from one tariff mechanism to another. That, combined with the fact that the Section 232 tariffs on raw inputs like steel and aluminum will remain in place, means that this Supreme Court ruling could ultimately be less consequential for the construction industry.”

The Yale Budget Lab maintains a list of the tariffs imposed through IEEPA.

Construction materials prices have remained elevated over the past year. According to ABC’s analysis of U.S. Bureau of Labor Statistics Producer Price Index data released on Jan. 30, 2026, overall construction input prices are 2.8% higher than a year ago, and nonresidential construction input prices are up 3.2%.

Certain tariff-sensitive materials have recorded sharper increases. Copper wire and cable prices rose 4.6% in December and are up more than 22.3% year over year. Prices for primary nonferrous metals have increased nearly 62% over the past 12 months.

Construction input prices declined 0.6% in December on a monthly basis. According to ABC’s Construction Confidence Index, 7 in 10 contractors expect their profit margins to remain stable or improve over the next two quarters.

While the decision invalidates tariffs imposed under IEEPA in 2025, it does not address the timing or process for potential refunds of previously collected duties.

Chief Justice John Roberts wrote the majority opinion, joined by justices Sonia Sotomayor, Elena Kagan, Neil Gorsuch, Amy Coney Barrett and Ketanji Brown Jackson. Justices Clarence Thomas, Samuel Alito and Brett Kavanaugh dissented.

ABC will continue to monitor legal and policy developments affecting construction supply chains and materials pricing.