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The U.S. Supreme Court ruled Friday morning that a broad slice of President Donald Trump’s tariffs on foreign goods were illegal. But what seems like a simple move by the court is throwing up lots of questions for everyone in the Massachusetts real estate industry.
The 6-3 ruling says Trump overstepped the bounds of the 1977 International Emergency Economic Powers Act, or IEEPA, when slapping tariffs on a range of imported goods, including the tariffs unveiled during last spring’s “Liberation Day” event on April 1 and other tariffs on many Chinese, Canadian and Mexican products.
But it still leaves the taxes in place on steel, aluminum, lumber and products like kitchen cabinets, The Associated Press reports. The president used a different law to enact those, which the case behind Friday’s ruling didn’t address.
“While the Supreme Court’s ruling reins in presidential authority to impose tariffs under IEEPA, President Trump still has wide latitude in setting tariff policy. With the nation facing a housing affordability crisis, NAHB urges the president to exempt building materials as part of his tariff strategy because they raise construction costs, impede supply chains and result in market and business uncertainty that make it difficult for builders to price their homes,” National Association of Home Builders Chairman Bill Owens, who’s also a homebuilder and remodeler from Ohio, said in a statement.
Developers Trying to Understand Impact
Boston-based developer Evan Smith, who specializes in Passive House and other high-efficiency multifamily building types, said his sector has been hit particularly hard by tariffs on appliances and other finishes, many of which may not be covered by Friday’s ruling. The high-efficiency sector is particularly reliant on imported European and Canadian HVAC equipment, shower fixtures, appliances and windows, among other products, where tariffs drove prices up by as much as 50 percent in some cases, Smith said.
“It’s one thing if labor costs go up. That’s something [subcontractors] can control. But tariffs are a tax,” he said.
Smith now plans to go through his projects that are under construction, and future projects already out to bid, in the hopes of trimming out what tariff costs he and his subcontractors can.
“I’ve got two projects going right now,” he said. “It’s about $7.5 million worth of construction. I bet tariffs have added at least $200,000 or more to those projects and the big challenge for me will be disentangling those numbers from other costs.”
Increased costs drive by the president’s tariffs have also been partly blamed for a slowdown in construction locally and nationally, with lumber mills cutting back on production in response and creating uncertainty for those supplies in 2026.
Will Refunds Happen?
It’s not yet clear how or whether American businesses will be able to get refunds on tariffs they’ve already paid over the past year. The Supreme Court’s ruling didn’t address the topic, and a dissenting opinion from Supreme Court Justice Brett Kavanaugh suggested that the process would be “a mess.”
“If the authority was unlawful, the collections were unlawful Every penny taken from small businesses under this framework should be returned,” Main Street Alliance Executive Director Richard Evans said in a statement.
The alliance is a national small-business advocacy group that took a leading role in lobbying Congress and the public against the tariffs, which trickle down through prices to be paid by American consumers, retailers and wholesalers.
“Small business owners were told tariffs would make America stronger,” Trent said. “Instead, they saw margins collapse, hiring freeze, and uncertainty spike. They spoke up. Lawmakers listened. And today, the Supreme Court affirmed that executive power has limits.”
In Massachusetts, the head one of the state’s biggest business groups said the 3,400 members of the Associated Industries of Massachusetts were “gratified” by the ruling. The association’s business sentiment tracker showed significant dips even when Trump’s “Liberation Day” tariffs were announced.
“The tariffs imposed in 2025 represent the largest US tax increase as a percent of GDP since 1993 and have burdened Massachusetts employers with increased costs, disrupted supply chains and retaliation in overseas markets,” President and CEO Brooke Thompson said in a statement. “Massachusetts companies export some $77 billion worth of goods each year to 210 markets globally, and support one of five jobs in the commonwealth. It is our firm hope that today’s ruling will reinvigorate international trade and confirm the status of our commonwealth as a global center of economic growth and opportunity.”
