What CRE Needs To Know Ahead Of Trump's Supreme Court Tariff Battle

President Donald Trump faces a key legal challenge this week, when the Supreme Court will begin hearing arguments Wednesday on a case in which the petitioners say he illegally used emergency powers to impose sizable tariffs. 

The case will have a lasting impact on how the president is able to implement levies and will potentially give CRE stakeholders more confidence in future decision-making.

Here’s what CRE needs to know as trade turbulence heads to the highest court in the land.

What Exactly Is The Case About?

Trump has used multiple methods to enact sweeping tariffs on most of the country’s trading partners, but the Supreme Court case centers on Trump’s use of a 1970s-era emergency law called the International Emergency Economic Powers Act. The law includes the power to “regulate” imports but does not mention the words “tariffs,” “taxes” or “duties.”

Trump is arguing the law gives him the power to impose tariffs unilaterally during emergencies. He did so to levy goods imported from China, Canada and Mexico, saying those countries were failing to stop the flow of fentanyl into the U.S. On “Liberation Day,” when the president announced wide-ranging tariffs on more than 100 trading partners, he said trade deficits with the rest of the world had reached emergency level. 

A group of small businesses, including an Illinois-based toymaker and a New York-based wine importer, sued the federal government, alleging Trump’s actions were unlawful, ate into profits, forced them to lay off employees and increased prices. Lower courts have ruled that Trump’s use of IEEPA to enact tariffs is illegal.

“Next week’s Case on Tariffs is one of the most important in the History of the Country,” Trump said in a Truth Social post Sunday. “If a President is not allowed to use Tariffs, we will be at a major disadvantage against all other Countries throughout the World.” 

A ruling against the Trump administration could lead to the refunding of collected taxes to affected businesses, though legal experts say that would likely be adjudicated in a separate case.

Would This Decision Kill All Of Trump's Tariffs?

No. 

The government raised $195B in customs revenues in the 2025 fiscal year, over three times more than the previous fiscal year. IEEPA tariffs make up about half of that, Deutsche Bank estimated in a research note on Monday. 

Some of the balance comes from tariffs that predate Trump, and some are levies Trump enacted via statutes under other trade laws. Those have procedural guardrails that are harder to work around, said Marc Busch, professor of international business diplomacy at the Georgetown University School of Foreign Service. 

“He went to IEEPA because he wanted a blank check,” he said. 

When Can We Expect A Decision?

Nobody knows — but it could be awhile. 

“Some people are saying the Supreme Court is going to drag its feet and not rule until maybe June,” Busch said. “Others are saying it's such a dire issue that we should expect a ruling before the end of 2025. It's really a big question mark.”

If The Supreme Court Upholds The IEEPA Tariffs, What Does That Mean For CRE?

If the Supreme Court upholds the tariffs and Congress votes in January to uphold the national emergency underlying them — which the administration argues is the trade deficit itself — Trump would have expansive power over trade, Busch said. 

“You would essentially have the permanent delegation of trade policy to the president, which was never the intention of Congress or the Founding Fathers to begin with,” he said. 

And that could lead to more policy instability, which has impacted CRE dealmaking.

Trump has implemented and subsequently withdrawn tariffs on various products and countries on short notice since he started his second term in January. The historically high rates have started to leave an imprint on the real estate industry, and their rubber-stamping would pave the road for continued impact.

“Current tariff policies have created confusion, pricing uncertainty, and whipsawed buyers, sellers, owners, developers, and occupiers,” Avison Young CEO Mark Rose told Bisnow in a statement. “If the U.S. Supreme Court upholds the use of the IEEPA to impose tariffs, it could reshape global trade dynamics and impact commercial real estate.”

Construction has felt the levies most quickly and sharply. Tariffs in effect include a 50% rate on steel, aluminum and various forms of copper. There is also a 10% to 25% charge on various lumber imports and a wide range of country-specific tariffs adding to the cost of building materials.

About 1 in 4 contractors had a project interrupted or paused in August because of tariffs, Associated Builders and Contractors Chief Economist Anirban Basu said in a release, the most recent that included commentary on tariff-related impacts. That was up from 1 in 5 in June. 

Rose said industrial and logistics sectors may benefit from reshoring trends, while higher costs could pressure retail and office markets. The retail sector could face long-term headwinds if higher costs are passed to consumers, which could dampen consumer spending. 

The average prices of imported items were just 2% higher in August 2025 than in October 2024, according to an academic study. But the Peterson Institute for International Economics found that in July, tariffs on imported consumer goods comprised roughly 13% of the total value of monthly imports. 

That indicates tariffs hadn't completely filtered into retail prices yet.

But there have been some reports of retailers taking sharp blows from tariffs. Carter’s, a children’s apparel giant, is set to close 150 stores and lay off 300 office employees, blaming tariffs and rising costs for slimmer profit margins.

If The Supreme Court Strikes Down The IEEPA Tariffs, What Does That Mean For CRE?

Perhaps not much. The administration will likely attempt to use other statutes to implement tariffs.

One particular favorite of the president, Busch said, is a provision that allows the president to enact tariffs on particular sectors to protect national security. This includes levies on semiconductors, pharmaceuticals, steel and aluminum. 

James Bohnaker, senior economist at Cushman & Wakefield, said it is unlikely the retail market will see a boost from a tariff reversal because the overall approach to trade policy isn’t likely to change. 

“In all likelihood, we're going to see the tariff regime kind of continue on this path, even if some of those country-specific tariffs are reversed,” he said. 

Those expecting to get some of their tariff costs refunded may also be left waiting for additional legal battles over refunds. 

Busch said it is unlikely the president would do an across-the-board tariff rebate, so odds are there would be “a lot more litigation” following this ruling. 

A tariff reversal could restore predictability for trade policy and ease pressure on supply chains, reducing costs for businesses, Rose said. That could temper the urgency of reshoring for CRE but support broader economic stability, benefiting demand across industrial, retail and office. 

“Rolling back tariffs help retailers and developers alike by cutting import and construction costs, improving profit margins, restoring consumer confidence, and reigniting investment,” Rose said. “Clarity in policy is always good for long-term planning and investment.”

What Do Markets Expect Will Happen?

Traders are mostly putting their money on the Supreme Court overturning the tariffs. Betting platform Polymarket had a 36% chance the Supreme Court rules in favor of Trump’s tariffs, while Kalshi priced the decision at a 37% chance as of Monday evening.

In more traditional markets, Wall Street is arranging bets on tariff refunds if the court rules against Trump. Importing companies are effectively selling the future rights to claim refunds on their tariff bills, and investors are purchasing at a discount to those companies’ expected refunds. 

Most of the trades range from $2M to $20M, with few over $100M, Bloomberg reported.