“Constant changes in tariff rates, effective dates and other provisions have made it difficult for contractors to price projects and have likely led owners to postpone going forward until they know their input costs and demand or need for structures,” said Ken Simonson, chief economist for the Associated General Contractors of America, in an email.

Slowdowns are being seen in architectural billings, a leading indicator for the strength of downstream construction markets, while materials prices have spiked at a time when construction spending is contracting, although growing data center and energy sector markets are softening the contraction to some extent, said Anirban Basu, chief economist for the Associated Builders and Contractors in an interview with ENR. 

Related to the cases before the high court—Learning Resources, Inc. v Trump, and Trump v V.O.S. Selections—justices did not seem inclined to agree with the Trump administration’s core argument, offered by U.S. Justice Dept. Solicitor General John Sauer, that language in the International Emergency Economic Powers Act giving the president authority to “regulate importation” can be interpreted as also conferring authority to impose tariffs during a national emergency. 

Sauer said Trump concluded earlier this year that “exploding trade deficits” and trafficking of fentanyl and other opioids have created a national emergency because they are threats to national and economic security. 

But several justices—including those in the conservative majority—were skeptical. Associate Justice Amy Coney Barrett asked Sauer, “Is it your contention that every country needed to be tariffed because of threats to the defense and industrial base? I mean, Spain, France? I could see it with some countries, but explain to me why as many countries needed to be subject to the reciprocal tariff policy as are.” 

Sauer’s arguments relied heavily on President Richard Nixon imposing across-the-board tariffs on all major trading partners in 1971 as a negotiation tool. Two years later, Congress enacted the International Emergency Economic Powers Act with the words “regulate importation,” which Sauer said codified Nixon’s actions.  

Chief Justice John Roberts said, “You have claimed a source in [the act] that had never before been used to justify tariffs. No one has argued that it does until this particular case. Congress uses tariffs in other provisions but not here.”

Associate Justice Brett Kavanaugh added that “One problem you have is that presidents since [the act was enacted] have not done this. Your primary answer, or one of your many answers to that, is the Nixon example.” 

Neal Katyal, former solicitor general in the Obama administration and now a law firm partner who argued on behalf of the private companiy plainriffs, said the International Emergency Economic Powers Act is the wrong vehicle under which to impose tariffs, because they are essentially taxes. “Even though presidents have used [it] to impose economic sanctions thousands of times, no president in [its] 50-year lifetime has tried to impose tariffs,” he said, adding that the president bypassed statutes that do directly authorize tariffs that provide guardrails and caps.

ABC economist Basu notes that even if the Supreme Court rejects the administration’s arguments, it’s difficult to know how the construction sector will be affected because it is nearly impossible to predict how the president will respond. 

“If, in fact, the Trump administration simply authorizes new tariffs based on new sections of the code, then there really isn't much change at all economically [for contractors],” he says. But If the administration "decides that it can't respond that way because the court has made a judgment that makes it difficult for [it] to replace those tariffs using other mechanisms, then that means some forward-looking relief for contractors buying inputs to construction.”