Intelligent Investment
Impact of Supreme Court’s Tariff Ruling on Industrial Real Estate
February 27, 2026 3 Minute Read
The Supreme Court’s recent ruling that limits President Trump’s authority to impose tariffs likely will reduce trade policy volatility and bolster the USMCA, supporting both import activity and domestic manufacturing investment. Stronger port cargo volumes, sustained trade with Mexico and a spike in lease expirations should result in more industrial leasing activity this year.
Coastal gateway markets and industrial outdoor storage (IOS) assets are positioned to benefit the most. However, questions remain after President Trump—in a work-around to the Supreme Court ruling—immediately levied a 10% tariff on all imported goods for 150 days before congressional approval is required.
We expect that the Supreme Court ruling will contribute to the following trends:
- Overall industrial real estate leasing activity will increase by at least 5% this year. Last year saw a 12% increase despite ongoing tariff uncertainty, largely due to many tenants facing lease expirations.
- President Trump’s diminished ability to unilaterally impose tariffs will shore up existing trade agreements—especially the USMCA, keeping Mexico as a top trade partner. U.S. markets with direct access to and from Mexico will continue to prosper, with improved fundamentals along both sides of the border.
- The de minimis loophole that allowed foreign shipments valued at less than $800 to enter the U.S. duty-free will remain closed. Significant growth in Asia-based third-party logistics 3PL providers has driven demand in Southern California, especially the Inland Empire. With the de minimis loophole remaining unavailable, the threat of occupancy loss from these Asia-based 3PL providers is diminished.
- Lower costs for imported goods should stabilize business investment and consumer spending, as well as boost import volumes at U.S. seaports, especially the ports of Los Angeles and Long Beach. Stable port volume and less development should lower vacancy rates and lead to long-term rent growth for Southern California.
- Limiting executive authority to impose tariffs could take away capital-expense-related worries and increase manufacturing investment. Last year, domestic manufacturing got a boost from companies that were seeking to avoid tariffs on raw materials. However, tariff avoidance is only one factor in the decision about where to locate manufacturing. Decision-making will now be mostly focused on tax credits for increased domestic manufacturing, supply chain resiliency, proximity to end markets and advances in labor automation and robotics.
- A brighter outlook for imports along with projected growth in manufacturing- and infrastructure-related spending could benefit IOS assets more than any other industrial property type. IOS will be a more attractive investment in both coastal and inland logistics hubs.
Industrial markets that could benefit the most from the Supreme Court ruling include:
- Chicago
- Dallas-Fort Worth
- El Paso
- Houston
- Inland Empire
- Kansas City
- Los Angeles
- Northern & Central New Jersey
- Phoenix
- Savannah
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