Report: US Tariffs Struck Down, Warehouses Tighten
The February Supply Chain Report from ITS Logistics highlights that the U.S. Supreme Court struck down tariffs from the Trump administration, which will have significant implications for the global market. The report also notes that warehouse capacity is tightening early in the year despite easing inflation. These factors are contributing to shifting import behaviors among businesses.
The Supreme Court's 6-3 decision in *Learning Resources, Inc. v. Trump* on February 20, 2026, found that the International Emergency Economic Powers Act (IEEPA) does not grant the president the authority to impose broad, revenue-generating tariffs. Chief Justice John Roberts, writing for the majority, stated that the power to tax is a core function of Congress and cannot be so broadly delegated. This ruling specifically impacts the sweeping tariffs the Trump administration implemented citing national emergencies related to the trade deficit and fentanyl trafficking. However, it does not affect tariffs imposed under other legal authorities, such as the Section 232 tariffs on steel and aluminum or the Section 301 tariffs targeting China's trade practices. In a swift response, the administration invoked Section 122 of the Trade Act of 1974 to impose a temporary 15% global tariff. This provision allows for a tariff of up to 15% for a maximum of 150 days, creating a window of fresh uncertainty for importers and forcing many to re-evaluate sourcing strategies developed over the past six months. The ongoing tariff volatility is expected to trigger another wave of front-loading, similar to what occurred in 2025 when businesses rushed to import goods ahead of anticipated duties. January 2026 container import volumes of 2.32 million TEUs had suggested a return to normal seasonal patterns before the court's decision disrupted supply chain planning once again. While the national industrial warehouse vacancy rate stabilized at 7.1% in late 2025, this figure masks a significant divergence. Vacancy for large warehouses over 300,000 square feet is near 10%, but space in facilities under 50,000 square feet remains exceptionally tight with vacancy rates around 4.8%. This "bifurcation" in warehouse availability means that while large distributors may find space, the small- and medium-sized businesses that rely on smaller footprints face a much more constrained and competitive market. The continued demand for these smaller, more flexible spaces, coupled with a slowdown in new construction, is keeping lease rates high despite the higher overall vacancy numbers.
