Supreme Court Tariff Ruling Offers No Relief for HVACR Industry

WASHINGTON — In a 6-3 decision last week, the Supreme Court ruled that the Trump administration overstepped its authority by using emergency powers under the International Emergency Economic Powers Act (IEEPA) to impose broad tariffs. 

While the ruling deals a significant setback to the Trump administration's trade agenda, don't expect to see much of an impact in the HVACR and plumbing industries.

According to Mark Valentini, vice president of legislative affairs for PHCC — National Association, the Supreme Court ruling was specific to Section 122 and did not pertain to Section 232, which relates to the steel and copper tariffs more specific to plumbing and HVAC. "For now, in light of the Court's ruling and the administration's reaction, we don't expect any immediate impacts to our industry other than the response we have seen in the markets. Perhaps when the dust settles a bit, we can get a clearer picture."

ACCA also released a statement on the ruling: "President Trump’s new tariff creates uncertainty around what it means for tariffs and exemptions outside the scope of the court’s ruling. As always, ACCA will continue to monitor developments and advocate for policies that support contractors and their customers."

President Trump's Plan B

A new tariff on most global imports went into effect in the United States just after midnight Tuesday at 10 percent, despite President Donald Trump’s pledge over the weekend to impose a 15 percent rate on social media. 

The 10% tariff is imposed under Section 122 of the Trade Act of 1974, which comes with a statutory time limit of 150 days. However, Kolbe notes that additional tariffs from the White House will be coming within the next four months under Sections 232, 338, and 301. 

During his State of the Union address Tuesday night, President Trump credited tariffs as a central driver of what he described as a historic economic turnaround, citing stock market milestones, revenue gains of “hundreds of billions of dollars,” and successful trade negotiations. He argued that tariffs forced other countries to make favorable deals with the United States, strengthened national security, and did not cause inflation.

Trump called last week's U.S. Supreme Court ruling against his tariff authority “unfortunate,” but said most countries and corporations intend to maintain existing trade agreements. He asserted that his administration can preserve or renegotiate tariffs under alternative, legally tested statutes without congressional action. Trump added that tariffs could eventually replace much of the income tax system by generating revenue from foreign nations instead of American taxpayers.

What Comes Next

Industry associations will be closely monitoring trade developments in the coming months and advocating for contracting businesses.

"Since SMACNA has countless federal and state infrastructure contractors, many with existing contracts where the tariffs boosted material costs after the project had been bid and work begun. We have turned our focus to seeking relief for those firms as the courts sort out the rest of the tariff issues being litigated," Kolbe says. 

Kolbe also notes that SMACNA is urging immediate administrative action from the Trump Administration to protect subcontractors from tariff-driven cost increases on federal projects. The group is calling for clear federal guidance allowing subcontractors to use economic price adjustment (EPA) clauses when tariffs raise material costs, ensuring they receive the same protections as prime contractors. SMACNA also wants adjustments limited strictly to tariff-related cost increases, not price reductions if tariffs are lifted, and is seeking standardized documentation requirements to streamline claims.

In addition to administrative action, SMACNA is advocating legislative changes that would mandate the flow-down of EPA clauses to subcontracts, formally authorize subcontractor tariff-related price adjustments, and prevent retroactive price reductions after materials are purchased. Kolbe emphasized that without these protections, subcontractors face significant financial strain that could limit participation in federal projects and threaten overall business viability.