Supreme Court tariff ruling unlikely to make meaningful difference to construction equipment prices

US Supreme Court justices voted 6-3 last week to strike down import taxes imposed by Trump, after finding that he had overstepped his powers using the International Emergency Economic Powers Act (IEEPA).

Trump criticised that decision and responded first by announcing a 10% levy on all goods coming into the US using a temporary solution under Section 122 of the 1974 Trade Act. He later took to his social media platform over the weekend to increase that to 15%.

The 10% tariffs that Trump announced came into force today (24 February) although it is not clear if the 15% tariffs he subsequently announced will eventually apply.

It’s also unclear whether the 15% rate will apply to countries that negotiated lower rates such as the UK and Australia, which had both agreed a 10% tariff in the wake of Trump’s ‘Liberation Day’ tariffs announced last year.

The latest developments in US trade policy are likely to inject more uncertainty into supply chains and could impact pricing, hiring, and investment plans across the broader US and world economy.

But as far as construction equipment prices are concerned, little is expected to change. That’s because separate tariffs on steel and aluminium, expanded to 50% in the summer of 2025 under Section 232 of the Trade Expansion Act, were not affected by the US Supreme Court ruling.

Previous analysis by Off-Highway Research last year found that the effect of the Section 232 tariffs is much more significant than the Liberation Day tariffs because they apply to the value of the metal contained in products derived from those materials.

The high steel content of most construction equipment means that the Section 232 tariffs essentially level the playing field so that price increases on machines made in the European Union, for example, could be almost as high as those from countries like China, with whom the US purports to have less friendly relations.

The incorporation of imported steel in US machines and components means that even US-made machines are likely to see a significant increase in price.

“The issue for the construction equipment industry is that the steel content of the products is so high that the 50% tariff on this element of the machine, component, part or attachment will override any (lower) tariff which has been previously negotiated. All imports will face a high tax on being landed in the US and the country of origin will no longer be particularly relevant,” said Off-Highway Research managing director, Chris Sleight, commenting on the Section 232 tariffs last year.

Off-Highway Research last year calculated that US-based equipment buyers would face a bill 27% higher than before the Liberation Day and Section 232 tariffs were introduced. Those calculations are complex and rely on a series of assumptions but are not expected to change significantly as a result of the US Supreme Court’s decision or Trump’s response.

Lumber also appears largely unaffected

Another key material in construction – lumber – is also likely to be largely unaffected by the latest developments.

The Trump administration issued a proclamation in September last year imposing a 10% duty rate on imports of softwood timber and lumber, 25% on certain upholstered wooden products, and 25% on kitchen cabinets, under Section 232, citing national security concerns.

The rates on upholstered wooden products and on kitchen cabinets were set to rise to 30% and 50% respectively from 1 January 2026.

Those tariffs are also unchanged following the US Supreme Court’s decision, as are long-standing anti-dumping duties imposed on lumber imports from the USA’s North American neighbour Canada.

‘Messy’ refunds process

Since sweeping “reciprocal” tariffs were introduced on Liberation Day in 2025, as well as separate IEEPA-based tariffs on Canada, China, and Mexico linked to declarations of a “fentanyl emergency”, US Customs and Border Protection has collected an estimated $133.5 billion in IEEPA-specific tariff revenue through to mid-December 2025, according to an article on the issue published last week by Christopher Ng, managing partner, at law firm Gibbs Giden.

Ng said that “unwinding tariffs that have already been paid and embedded into project economics” as a result of the ruling introduced a new challenge for construction companies.

However, any tariff refund process is expected to be “a mess” and Ng noted that refunds flow to the importer of record and not downstream contractors, subcontractors, or owners who ultimately bore the cost.

Ng said, “Going forward, contracts should address allocation of tariff risk with specificity (defining what constitutes a tariff, which statutory authorities qualify, and baseline rate assumptions); refund ownership (specifying who owns the recovery if duties are later reduced, credited, refunded, or declared unlawful, along with cooperation obligations and audit rights); and documentation requirements.”