The U.S. Supreme Court’s ruling on the legality of President Donald Trump imposing tariffs due to emergency could change the North American commercial real estate landscape, says Avison Young Chair and CEO Mark Rose.

America’s highest court is currently reviewing whether Trump had the right to hike tariffs under the International Emergency Economic Powers ACT (IEEPA) on grounds that illegal shipments of fentanyl and immigrants who entered the country illegally constituted a threat to U.S. national security. The U.S. government has brought the case to the Supreme Court after lower courts ruled that Trump overstepped his presidential powers.

“Current tariff policies have created confusion, pricing uncertainty, and whipsawed buyers, sellers, owners, developers, and occupiers,” said Rose. “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.”

Although the industrial and logistics sectors may benefit from reshoring trends, the higher costs could pressure retail and office markets, he added.

“The retail sector could face long-term headwinds if higher costs are passed through to consumers, which could dampen consumer spending,” said Rose. “In this evolving landscape, commercial real estate investors and occupiers will need to stay agile, building flexibility into their strategies.”

During oral arguments Wednesday, Supreme Court justices questioned whether Trump needed to impose tariff increases under the emergency-powers legislation. But Neal Katyal, a U.S. government lawyer, and U.S. Solicitor-General John Sauer told the court that the tariffs were imposed for regulatory reasons, not to generate additional revenue.

That claim contradicted Trump’s frequent comments about his love for tariffs and his many complaints about the U.S. trade deficit and having to suffer from a bad free-trade deal with Canada.

Citing calculations from investment bank Piper Sandler, The Globe and Mail reported that the U.S. government would have to refund imports US$140 billion in tariffs paid, if the Supreme Court rules against Trump. If the court does strike down the tariffs imposed under the IEEPA, that could restore predictability to U.S. trade policy, easing pressure on supply chains and reducing costs for businesses, said Rose.

“For commercial real estate, this may temper the urgency of reshoring, but it also supports broader economic stability, which benefits demand across industrial, retail, and office sectors,” he added. “Rolling back tariffs helps retailers and developers alike by cutting import and construction costs, improving profit margins, restoring consumer confidence, and reigniting investment.

“It’s a clear reminder that global trade policy doesn’t just shape international markets – it directly affects Main Street. Clarity in policy is always good for long-term planning and investment.”

The high court is not expected to render its decision for a number of months.

Pictured: Avison Young Chair and CEO Mark Rose.

Photo: Courtesy of Jamie Kelter-Davis of Women Photograph, on behalf of Avison Young.