Learning Resources v. Trump: Limited Relief For Water Infrastructure Costs

If you have been following water infrastructure construction news over the past year, you have certainly been keeping up to date on the tariffs implemented by President Donald Trump and wondering how these tariffs have affected, and will affect, the price of water infrastructure projects throughout the United States. And you may have also been wondering — is all of this legal? On February 20, 2026, the Supreme Court of the United States responded with a no, at least to a portion of that question in Learning Resources v. Trump¹.

Learning Resources v. Trump was initiated by two family-owned businesses (Plaintiffs) that design and distribute educational products across the United States. Most of these businesses’ production is outsourced overseas, including to China. As part of President Trump’s sweeping executive orders issued shortly after he re-assumed office in early 2025, the President imposed tariffs on imports from foreign counties, including goods from China. Some of the goods affected by these tariffs included semiconductors and computer products, autos and auto parts, commercial vehicles, steel, aluminum, copper, timber, lumber and other derivative products including furniture and fixtures. In imposing some of the tariffs, the President invoked the International Emergency Economic Powers Act (IEEPA), a 1977 federal law which allows the President to regulate international commerce after declaring a national emergency in response to an “unusual and extraordinary threat” to the United States from a foreign source. Specifically, the President indicated these tariffs were a response to the “threat” on the United States resulting from fentanyl trafficking and trade imbalances coming from foreign nations, including Canada, Mexico and China. Plaintiffs sued the Trump Administration, arguing that the IEEPA does not permit the President to unilaterally impose tariffs and, as a result, tariffs imposed in reliance on IEEPA were unconstitutional.

The Supreme Court agreed, finding that the President’s ability to “regulate the importation” of goods during a national emergency under the IEEPA does not extend to the imposition of tariffs or any other taxing authority, which is solely held by Congress. While this may seem like good news for the water infrastructure projects that regularly incorporate foreign goods and materials, the Supreme Court’s decision did very little to lower the increasing costs of these projects resulting from the President’s tariffs because most materials used in water infrastructure projects remain covered by tariffs imposed on federal laws other than IEEPA.

Importantly, the decision did not affect tariffs that have been imposed on construction materials such as steel, aluminum and auto parts, or the global baseline tariffs on all imported goods, which were all justified based on other federal laws. Therefore, steel, aluminum and copper are all still subject to 50% tariffs and tariffs on timber and lumber remain at 10% across the board. The only construction-specific materials and goods subject to the IEEPA tariffs were specialty equipment, HVAC equipment and electrical systems and fixtures, which should all see price decreases.

Most crucially for project owners who may have already overpaid for materials which were affected by now vacated IEEPA tariffs, the Supreme Court did not reach the issue of reimbursement. Since the Supreme Court’s decision in Learning Resources, 2,000 importers have filed lawsuits seeking refunds for sums paid as a result of the illegal IEEPA tariffs. Recently, in Atmus Filtration, Inc. v. United States, the Court of International Trade ordered the United States Customs and Border Protection to develop a process for issuing refunds to affected importers, though the Trump Administration is likely to appeal. While the establishment of a process for refunds may benefit affected importers, project owners who indirectly incurred these price increases may have no recourse, as the tariff was not paid by them directly. Moving forward, and given the remaining uncertainty regarding the tariffs left unaffected by the Learning Resources decision, it is advisable that those constructing, operating and maintaining water infrastructure projects work reimbursement language into procurement contracts, even if at a discounted split with the material distributor, in order to potentially recover costs in the event other, more relevant, tariffs on construction goods and materials are struck down by courts in the future.

Footnote

1. Learning Resources, Inc. v. Trump, 146 S.Ct. 628 (2026)

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