The Supreme Court upended the U.S. trade landscape on Friday, striking down the centerpiece of President Trump’s second-term tariff program.

In a 6–3 decision in Learning Resources, Inc. v. Trump, the Court ruled just over one year into Trump’s second term, following pointed and skeptical questioning from several justices during oral arguments last November.

During the 8 JAN 2025 Acuity Brands’ investor call, Jeffrey Sprague of Vertical Research raised the issue directly. He asked how a major change in tariff legality might affect pricing and whether manufacturers would be expected to roll back prices if tariffs were struck down.

A Cautious View on a Disruptive Ruling

Responding to the question about the upcoming Supreme Court’s tariff decision, Acuity’s CEO Neil Ashe cautioned against assuming a clean or immediate unwind of tariffs. Even in the event of an adverse ruling, he suggested that the outcome may not be as disruptive as some expect. Ashe made clear that Acuity is not trying to predict the Court’s decision. Instead, he outlined what he called the company’s working hypothesis.

In his view, even if the Supreme Court were to rule tariffs invalid, the real-world impact would likely leave conditions “mostly the same.” Ashe pointed to the likelihood of counterbalancing actions. These could come through alternative administrative measures or revised statutory mechanisms.

“It just feels like if there were a completely adverse ruling, that there would be some counterbalance that would keep things roughly the same,” Ashe said. He added that the administration could respond in ways that preserve the current cost structure.

The Practical Problem of Tariff Refunds

Ashe then addressed the more extreme scenario: tariffs being disabled outright. In that case, the question becomes who would actually benefit from any recovered tariff costs. Ashe framed the issue in practical terms by walking through the flow of revenue in the lighting industry.

Manufacturers sell to distributors. Distributors sell to contractors. Contractors, in turn, sell to building owners. While not a literal sales process, Ashe noted that this sequence reflects how value moves through the channel.

“If we were to somehow realize the benefit from a tariff refund, who would we give it to?” Ashe asked rhetorically.

Why Price Rollbacks Are Unlikely

Ashe pushed that logic further downstream. A refund to distributors would assume a pass-through to contractors. That would then require contractors to pass savings on to building owners. Ashe made clear that such a chain reaction is highly unlikely.

“I just don’t think that seems reasonable,” he said.

His point was straightforward. Retroactively unwinding pricing across multiple layers of the channel would be extremely difficult, if not impossible. Instead of looking backward, Ashe suggested the industry would focus on adapting to whatever new market conditions emerge.

If tariffs were removed or reshaped, pricing and competitive dynamics would reset going forward. Acuity, he said, feels confident in its ability to adapt—just as it has through previous shifts in the trade environment.

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