The recent U.S. Supreme Court decision striking down a portion of the tariffs imposed under the International Emergency Economic Powers Act has introduced a new phase for the broader economy and commercial real estate. While the immediate legal change is clear, Cushman & Wakefield analysts note that the full implications for growth, inflation and property markets remain in flux.
In their analysis, the firm estimates that repealing the IEEPA-related tariffs could lower the effective tariff rate on U.S. imports to roughly 7%–9%. Although that level remains elevated, the reduced burden is expected to offer some relief to both businesses and households. The analysts also suggest that a lower tariff load and easing inflation could create conditions for the Federal Reserve to consider interest rate cuts in the second half of 2026.
For commercial real estate investors, the authors emphasize that the primary issue is not direct trade exposure but policy uncertainty. Shifting trade rules can affect financial conditions, alter risk premiums and challenge underwriting assumptions. So far, bond markets have shown only limited repricing, which the analysis interprets as investors seeing the ruling as a positive but incomplete step toward resolving trade-related risks.
The report highlights several channels through which the decision could affect commercial property. Companies that were directly or indirectly exposed to the tariffs, including retailers, manufacturers and logistics firms, had responded with workforce reductions, deferred leasing decisions and other cost-cutting efforts. Lower tariffs should ease some of that pressure, potentially improving operating performance for these occupiers over time.
At the same time, the analysts caution that many occupiers may slow or delay real estate decisions while policy transitions play out. Site selection, long-term leases and capital deployment may proceed more deliberately until there is greater clarity around future trade enforcement and fiscal policy. This is particularly relevant for industrial and retail leasing, which saw improvement in late 2025 but now face renewed downside risk linked to elevated policy uncertainty.
One area where the ruling offers little relief is construction. Existing tariffs on key building materials such as steel, aluminum and copper remain in place. According to the analysis, these measures have pushed building materials inflation nearly three percentage points higher, and when combined with ongoing labor scarcity, they continue to weigh on project costs and schedules. As a result, commercial real estate development is expected to contend with elevated construction costs and timing risks despite the IEEPA change.
The analysts conclude that the rollback of IEEPA tariffs has raised new questions about future trade policy and fiscal impacts, contributing to short-term market volatility. Even so, they anticipate a gradual improvement in inflation, economic growth and leasing activity over the course of 2026. They also point to the resilience that businesses and households have shown through prior trade policy shifts, and expect that policy uncertainty will slowly diminish as the new framework becomes clearer.
