On February 20, the U.S. Supreme Court issued a decision holding that the International Emergency Economic Powers Act (IEEPA) does NOT authorize the President to impose tariffs. However, the Court did not order refunds or set a refund process for tariffs already paid. Any tariff refunds (if they occur) would generally run through normal Customs processes and typically go back to the importer of record who paid the tariff invoice (usually not the contractor).
AGC of America is still actively analyzing the effects of the ruling, but below are the top-level takeaways for members.
This decision is specific to IEEPA-based tariffs, meaning the following tariffs have been struck down:
- Reciprocal
- Minimum universal/global tariffs
- China
- Canada
- Mexico
- Brazil
- India
Be sure to check out AGC’s Tariff Resource Center for Contractors to stay updated on the latest.
The Administration has already pivoted to a “Plan B,” issuing a temporary global tariff of 10% under Section 122 of the Trade Act of 1974 for up 150 days. Imposing tariffs under Section 122 is incredibly rare and legally untested, meaning that court challenges for this tariff are to be expected in the future.
In addition, previously imposed tariffs on construction materials such as steel, aluminum, copper, and softwood lumber are still in effect as they were put in place using other trade laws that have stood up to court challenges.