How the Supreme Court ruling impacts corporate site selection.
If you’re basing your corporate site location strategy around ever-changing tariff policy, you’re likely making bad decisions.
That’s the consensus of the experts we interviewed in the wake of the recent U.S. Supreme Court ruling declaring President Trump’s usage of the International Emergency Economic Powers Act (IEEPA) to enact global trade tariffs as unconstitutional.
Put another way, these experts advise everyone to “go back to the basics that work.”
While their reaction was unanimously positive to the February 20 SCOTUS decision in Learning Resources v. Trump, the people we interviewed said that relief from global tariffs may only be temporary; and they said that’s all the more reason to ground your site selection strategy in proven fundamentals that stand the test of time amid the ever-changing whims of political dictates.
In other words, while invoking the IEEPA to enact tariffs has been nullified, the president and possibly Congress may resort to other means to enact new tariffs. Trump signaled as much when he immediately pivoted after the SCOTUS decision to use a separate law (Section 122 of the Trade Act of 1974) to impose a global 10% tariff.
“Site selection in 2026 isn’t about chasing incentives. It’s about protecting capital through scenario discipline. The companies making confident location decisions right now are the ones modeling volatility, not assuming stability. If your tariff exposure is uncertain, your site model should reflect that uncertainty — not ignore it.”
— Tara Buchler, Principal and Head of Strategy, JBF Consulting
“No one was surprised by the ruling,” says Tara Buchler, principal and head of strategy at JBF Consulting, headquartered in Guilford, Connecticut. “All of this is the new normal. Folks who operate in any aspect of the supply chain sector are no longer surprised by this uncertainty. What we’re telling our clients is this: Maximize your decisions by addressing all aspects of your supply chain — including execution and logistics.”
Rather than base site selection on tariff avoidance, Buchler says, companies should look at the bigger picture: “Site selection in 2026 isn’t about chasing incentives. It’s about protecting capital through scenario discipline. The companies making confident location decisions right now are the ones modeling volatility, not assuming stability. If your tariff exposure is uncertain, your site model should reflect that uncertainty — not ignore it.”
Treating uncertainty as the new normal impacts every location decision and every supply-chain decision a company makes, especially if the company imports and exports.
For example, Buchler notes, where you are shipping goods to and from is far more impactful than constantly changing tariffs. “Transportation assumptions that look small in a spreadsheet can compound into million-dollar variances at scale,” she says.
How to Pivot Right Now
In the short term, says Buchler, many of her firm’s clients are looking at larger strategic initiatives to deflect tariffs, such as moving toward foreign or free trade zones so they can have inventory on U.S. soil. “They are only bringing goods into the U.S. market when they must have them,” she notes.
The larger picture, however, is that “site selection and sourcing locations have been in flux since 2020 because of risk and resiliency,” she explains. “Free trade zones can be a hedge against tariffs. That gives you stability in an uncertain market. But that also brings added complexity. It is a heavily regulated program by the U.S. There are a lot of rules and regulations around how you have to operate once you are located inside them. FTZs are a big investment and they are more complex.”
Pexels image courtesy of National Association of Foreign-Trade Zones
Buchler advises corporate end-users to become more resilient. “Be more proactive in being able to shift and respond. Move away from being reactive,” she says. “Be ready to move at any given time. Unfortunately, that is still a challenge for a lot of our clients. But that is the only model our clients can adopt now.”
Modeling risk also means accounting for supply-chain disruptions caused by unanticipated global events such as war in the Middle East, says Buchler. “A real-time example today is how what is happening in the Middle East will disrupt shipping of automotive components,” she says. “Things produced in that region are key inputs to the U.S. economy. These commodities will cost more now. That cascades down to global transportation and distribution and trade.”
Buchler advises clients to not just focus on tariffs, real estate costs, labor costs and taxes:
“Consider the costs of shipping to markets from your site. We don’t know how much those things will cost in the future. We put together best and most-likely scenarios for costs. Unfortunately, those costs are often not included in initial scenarios for site selection.”
If you really want to beat tariffs, says Buchler, base your location strategy on things that deliver greater advantages. “Speed to market can be a key advantage over costs,” she says. “These decisions need to become much more holistic and focused on supply chain execution. Logistics is commonly seen as one of the least strategic areas in a company. Instead, it is seen as a cost center. That is a fallacy.”
Buchler adds that “over the next 12 months, site selection will be shaped less by a single directional shift such as onshoring and more by disciplined, scenario-based capital allocation where trade cost volatility, logistics variability and operational readiness are integrated into total landed cost modeling from the outset. Companies are not simply relocating facilities; they are pressure-testing investment decisions against multiple cost, policy and demand scenarios to ensure performance under uncertainty.”
How Tariffs Impacted a $4 Billion Project in Oklahoma
Didi Caldwell, president and CEO of Global Location Strategies in Greenville, South Carolina, concurs.
“My advice remains the same as always: You need to make decisions based on the fundamentals of the locations. Making decisions on regulatory policy subject to change is foolish,” she says. “Don’t choose a place just on incentives. Make your location decision because the fundamentals are strong. When you put that first shovel in the ground, you are married to that decision for the next 50 to 100 years.”
“My advice remains the same as always: You need to make decisions based on the fundamentals of the locations. Making decisions on regulatory policy subject to change is foolish.”
— Didi Caldwell, President and CEO, Global Location Strategies
Caldwell, whose firm has located some of the largest manufacturing projects in U.S. history, says the impact of the Trump tariffs in 2025 was profound for many of her clients. “Tariffs were relatively fixed and permanent before that. Now we have to model actively to see what happens to the business case because of them,” she says.
Caldwell cited one client in particular that was forced to pivot after Trump’s Liberation Day tariffs went into effect last April. “Emirates Global Aluminium (EGA) was in the middle of deciding where to build a new aluminum smelter when the tariffs policy came down last year,” says Caldwell. “Not a single new aluminum smelter had been built in the U.S. in over 40 years. Smelters are difficult to make the business case work unless you have control over inputs. One of the biggest inputs is energy. That is why we have not built them here in a long time. The fuel component is critical too.”
Introduce an element of volatility, she says, and all bets are off. “When you don’t control the price of inputs, that puts you in a precarious situation. When that happened around aluminum tariffs, they would have benefited from those tariffs if they had already been up and running in the U.S. But they were not yet building here. All the things they need to build plants in the U.S. are now subject to tariffs — things like steel, copper, etc. The tariffs made it more difficult to achieve a rate that would enable them to move forward.”
As reported in Site Selection, EGA’s original announcement occurred last May. Then, a month ago, EGA announced that it was partnering with Century Aluminum to build the $4 billion smelting plant in Inola just east of Tulsa, Oklahoma, on the Arkansas River. The project, which is slated to begin construction in late 2026, is expected to create 1,000 jobs.
“The reduction in some of the tariffs will help them,” Caldwell notes. “There was definitely a risk. Oklahoma was competing with Texas and Mississippi. The U.S. was competing with the UAE. They could build more capacity in the UAE.”
Expert Advice: Hedge Against Your Risks
Hedging against risk is the operative strategy now, says Caldwell.
“We’re facing volatile energy markets abroad and in the U.S. We’re facing a talent mismatch, and construction costs are rising. When you have one risk and then another and then another, it compounds. Companies become very disciplined when it comes to finding their next dollar. Companies will keep running their plants as long as the margins remain there. They’re making generational decisions. We’re doing more scenario analysis to help them figure out how to make the best long-term strategic decision for the company.”
For now, she says, it’s a matter of waiting to see what Washington will do. Trump’s new tariffs are good for only five months. “After using the emergency powers for 150 days, the president has to use Congress to pass them into law,” Caldwell says. “But these tariffs are front-loaded. Companies have to start paying these fees immediately.”
Caldwell says firms didn’t wait long to adjust their supply chain strategies last year. “Our Chinese imports fell, but we started seeing more imports from other countries. Capital moved to Mexico. Exports were impacted. Where we saw retaliatory tariffs, that’s where U.S. exports fell. Today, we’re looking at diversification of supply chains.”
On trade policy, Caldwell advocates a move toward stability. “Liberation Day took the teeth out of the USMCA [United States-Mexico-Canada Agreement]. I hope we see a return to some sense of normalcy on that.”
Melissa Irmen, Director of Advocacy, National Association of Foreign-Trade Zones
Also hoping for a return to normalcy is Melissa Irmen, director of advocacy for the National Association of Foreign-Trade Zones (NAFTZ). I spoke with her just three days after the U.S. Customs and Border Protection agency issued a statement delivering immediate relief for U.S. importers and exporters operating in Foreign-Trade Zones (FTZs). The agency said that “FTZ users will no longer be required to pay tariffs assessed under IEEPA authorities.”
The update resolved lingering confusion that had been mounting since the Supreme Court decision striking down the IEEPA tariffs on February 20. Some FTZ operators were still facing collections that ran counter to the court’s finding, raising alarm among companies relying on these zones to manage cashflows.
“It took us about a week, but we got it worked out,” says Irmen. “It has been corrected. IEEPA was replaced with Section 122. Anything brought in after that date (February 20) has the new tariff locked in. Once goods are moved from the FTZ, that tariff gets collected.”
Why Locating in an FTZ is a Good Bet
Irmen says that locating in a U.S. FTZ offers many benefits for importers and exporters. “My advice is to use your U.S. FTZ. It is an opportunity to get the goods in the country and take a pause and consider your options. If you export those goods, you don’t have to pay tariffs in the U.S. That duty deferral aspect is useful as well for cash flow positivity.”
Irmen says the association surveyed its members late last year to find out how much the Trump tariffs had impacted them. “Over half of the respondents said they would either increase their activity in the FTZ or stay the same [18%],” she says. “Of the economic development groups we surveyed, 83% said they saw an uptick in interest in the program and the number of applications to the program. We’re still seeing a lot of interest today. People are going back and looking at the benefits of FTZs again.”
83% of economic
development members of NAFTZ
said they saw an increase in interest
and applications to the
Foreign-Trade Zones
program in the U.S. last year.
Source: National Association of Foreign-Trade Zones
The industries that most benefit from locating operations in an FTZ, says Irmen, include automotive and auto parts; oil refineries; pharmaceuticals; heavy machinery equipment; consumer electronics; aircraft manufacturing; and any company that imports components necessary for the finished good but also uses a lot of domestic inputs.
“If you export from the U.S., you get even more benefits,” she notes. “If you import to the U.S., use the FTZ as a staging ground, and then ship to defer fees. There are some specific examples where tariffs are going down considerably. Section 122 is just 10% now; and there were a lot of trade deals in place where certain tariffs were maxed at a certain level. China is one example. They have seen a substantial decrease in tariffs.”
Pexels image courtesy of National Association of Foreign-Trade Zones
Irmen points out that NAFTZ does not advocate one way or the other on tariffs policy. “We focus on promoting the FTZ program and making sure that all of our members are treated fairly,” she says. “USMCA is an area where we want to see changes. We lobby on that. We are supporting legislation to help level the playing field for U.S. manufacturers. We want them to get fair duty-free treatment. Right now, it is still in place. The Office of the United States Trade Representative (USTR) announced last week that they are opening the review. It included a required 6-year review, and that begins this year. USTR just announced they are starting their negotiations with Canada and Mexico on that agreement.”
So far, interest in U.S. FTZs due to USMCA has been mixed. “I’ve heard of Canadian firms locating in U.S. FTZs, but I’ve not heard of Mexican firms doing that,” says Irmen.
Creighton Economist: ‘The Uncertainty is Too Much’
Another expert who craves a return to stability is well-known Omaha-based economist and Creighton University Professor Ernie Goss, who says that the Supreme Court “may have saved Trump from himself. The tariffs haven’t worked. The trade deficit for 2025 is only two-tenths of one percent lower than it was in 2024. What they did hurt was the American farmer. Ag exports to China dropped by 85% in the Mid-America states that Creighton surveys. It hit farmers very hard.”
Goss adds that “the President is not helping himself by slapping these tariffs on and off. It undermines our currency and pushes up the price of gold. Gold went up after Liberation Day. Why? People didn’t want to hold the dollar.”
What investors want more than anything is predictability, says Goss.
“The market reacted positively to the SCOTUS ruling. Not only are high tariffs bad for the economy, but the volatility and the uncertainty they create are even bigger,” he says. “Farmers are wondering what to do. What does China do? They had started to transship through Vietnam. Do companies now reshore or not? The uncertainty is too much.”
After a delay in the annual report to Congress by the U.S. FTZ Board delayed Site Selection’s annual November issue rankings of U.S. FTZs and states with most FTZ impact, recently released data mean the rankings will be published in the May 2026 issue. The issue also features Top Mexican Locations. And keep an eye out for fresh analysis of USMCA negotiations. — Ed.
