{"id":29866,"date":"2025-04-07T03:22:23","date_gmt":"2025-04-07T10:22:23","guid":{"rendered":"https:\/\/essential.construction\/news\/sweeping-new-tariffs-put-future-construction-projects-at-risk\/"},"modified":"2025-04-07T03:22:23","modified_gmt":"2025-04-07T10:22:23","slug":"sweeping-new-tariffs-put-future-construction-projects-at-risk","status":"publish","type":"post","link":"https:\/\/essential.construction\/news\/sweeping-new-tariffs-put-future-construction-projects-at-risk\/","title":{"rendered":"Sweeping new tariffs put future construction projects at risk"},"content":{"rendered":"<p> [ad_1]<br \/>\n<\/p>\n<div>\n<div class=\"text-to-speech\">\n    <button class=\"text-to-speech__button button\"><\/p>\n<p>            <img decoding=\"async\" class=\"text-to-speech__button__icon\" src=\"https:\/\/www.constructiondive.com\/static\/images\/audio_icon.svg?482016190122\" alt=\"-\"><\/p>\n<p>        Listen to the article<br \/>\n        <span class=\"text-to-speech__button__audio-length\">8 min<\/span><br \/>\n    <\/button><\/p>\n<div class=\"text-to-speech__controls\">\n        <audio controls=\"\" class=\"js-text-to-speech\" preload=\"none\"><source src=\"https:\/\/res.cloudinary.com\/dmgi9movl\/video\/upload\/q_1\/v1743692512\/news\/text_to_speech\/trump-tariffs-construction-risk-liberation-day_ixrtje.wav\" type=\"audio\/mp3\"><\/source><\/audio><\/p>\n<div class=\"text-to-speech__controls__text\">\n            This audio is auto-generated. Please let us know if you have <a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/contact\/\" target=\"_blank\">feedback<\/a>.\n        <\/div>\n<\/p><\/div>\n<\/div>\n<p><span><span><span><span><span><span>Owners and developers of commercial construction projects may hesitate to move forward with new work after President Donald Trump levied fresh tariffs on more than 180 countries, according to industry sources.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>On Wednesday, Trump announced a <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.supplychaindive.com\/news\/trump-reciprocal-tariffs-china-japan-eu-vietnam\/744301\/\" target=\"_blank\"><span><span><span><span><span><span><span>10% baseline tariff for all U.S. trading partners<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> with additional reciprocal tariffs for select nations, such as another 34% on Chinese imports and 20% on European Union imports.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Many key construction materials, such as steel, aluminum, lumber and copper, will be <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.whitehouse.gov\/fact-sheets\/2025\/04\/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-sovereignty-and-strengthen-our-national-and-economic-security\/\" target=\"_blank\"><span><span><span><span><span><span><span>exempted from these reciprocal tariffs<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>, according to a White House release. But importers of steel and aluminum have been paying <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/contractors-brace-steel-aluminum-tariff-impacts\/740119\/\" target=\"_blank\"><span><span><span><span><span><span><span>25% tariffs on these materials<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> since March 12, while Canadian softwood lumber importers pay a <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.nahb.org\/blog\/2025\/04\/uncertainty-reigns-liberation-day-tariffs#:~:text=The%20proposed%2025%25%20tariff%20on,and%20Mexico%20on%20April%202.\" target=\"_blank\"><span><span><span><span><span><span><span>14.5% anti-dumping and anti-subsidy tariff<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>, according to the National Association of Home Builders. That has been putting upward pressure on costs, said Anirban Basu, chief economist at Associated Builders and Contractors.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cMaterial prices are likely to rise in the coming months,\u201d said Basu. \u201cOn the nonresidential side, keep an eye on prices for iron and steel products, as well as aluminum. Notably, domestic steel prices have already risen significantly.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<figure class=\"image-right inside_story\">\n<div class=\"figure_content\">\n<div><img decoding=\"async\" alt=\"Headshot of a man with black curly hair.\" data-imagemodel=\"168211\" src=\"https:\/\/imgproxy.divecdn.com\/dkdr1CJvUt0pTylpSUNxmNoLBooIyOZmBApXIeDDhSI\/g:nowe:120:0\/c:748:936\/rs:fit:0:860\/Z3M6Ly9kaXZlc2l0ZS1zdG9yYWdlL2RpdmVpbWFnZS9BbmlyYmFuX0Jhc3Vfd3pBc1R2Vi5qcGc=.webp\"\/><\/div>\n<\/div><figcaption class=\"inside_story_caption\">\n<p>Anirban Basu<\/p>\n<p>Permission granted by ABC<\/p>\n<p>\u00a0<\/p>\n<\/figcaption><\/figure>\n<p><span><span><span><span><span><span>Price increases are expected, but they will take time to be worked into the system. Contractors tend to source products like concrete, gypsum and other raw materials domestically, so those are less likely to be impacted, said Tim Jed, supply chain leader at DPR Construction.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cHowever, even if products are domestically produced, tariffs could affect domestic pricing or lead times,\u201d said Jed. \u201cUltimately, what matters is, where are we buying from and where are those materials being imported from, but that\u2019s not an easy piece of information to get to.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<h3 class=\"standard-heading\"><span><span><span><strong><span><span>Future spending at risk<\/span><\/span><\/strong><\/span><\/span><\/span><\/h3>\n<p><span><span><span><span><span><span>Nonresidential materials prices jumped at a <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/construction-prices-far-too-hot-9-gain\/742487\/\" target=\"_blank\"><span><span><span><span><span><span><span>9% annualized rate<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> through the first two months of 2025 as builders rushed to gather materials. Overall construction inputs now sit 41% higher than February 2020, according to ABC.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>That jump in costs mixed with uncertainty on how markets will react to the new trade policy will likely start to slow construction investment activity, said Jeannine Cataldi, associate director of global construction at S&amp;P Global Market Intelligence. That will have an impact on nonresidential construction, specifically privately funded projects.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cMost construction activity will show these effects in a lagged fashion, as projects already started will largely continue,\u201d said Cataldi. \u201cIt is future spending that is most at risk.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Nonresidential construction spending hit $1.26 trillion in February, the <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/public-projects-boost-construction-spending-census\/744190\/\" target=\"_blank\"><span><span><span><span><span><span><span>highest level on record<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>, according to an ABC analysis of U.S. Census Bureau data released Tuesday. However, public construction projects largely accounted for that momentum, and even that may begin to fade, said Cataldi.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cInfrastructure will be impacted if funding is recalled \u2014 this is on hold currently \u2014 if rising material prices affect budgets, and the labor force is constrained by immigration policies,\u201d said Cataldi.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<h3 class=\"standard-heading\"><span><span><span><strong><span><span>Labor issues<\/span><\/span><\/strong><\/span><\/span><\/span><\/h3>\n<p><span><span><span><span><span><span>Along with prices, economists are keeping an eye on the hiring rate. If reciprocal tariffs contribute to construction layoffs and if businesses are not expanding their staffing levels, it will be difficult for the economy to maintain growth, said Basu.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>So even though contractors have escaped additional tariffs on steel, aluminum and copper, labor issues brought on by Trump\u2019s policies could put a dent in activity, said Michael Guckes, chief economist at Cincinnati-based ConstructConnect.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cWe remain very concerned about the construction labor market,\u201d said Guckes. \u201cWith the very real possibility of a contraction in labor due to heightened unauthorized worker deportations, we could see the biggest cost concern for the industry in 2025 come not from materials but from labor.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>How the market moves following what Trump calls his Liberation Day tariffs should provide a strong indication of how businesses will approach the new trade environment, said Basu.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>For data center and manufacturing contractors, for instance, activity will remain elevated regardless of tariff rates, said Basu. Construction firms can also expect substantial additional spending on highway and rail projects, and possibly broadband internet buildout in poorly connected areas, said Ken Simonson, chief economist at the Associated General Contractors of America.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<section class=\"storylines-carousel-wrapper hide-small show-large\" id=\"desktop-carousel\"\/>\n<p><span><span><span><span><span><span>Still, tariffs pose multiple threats to overall construction activity, including these sectors with strong momentum, said Simonson. Basu added prices for copper, a key material in data center construction, have jumped significantly to start 2025.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cCopper prices have taken off recently, they\u2019ve exploded to the upside,\u201d Basu said during an ABC economic outlook webinar on April 2. \u201cData centers use a ton of copper. There are some issues emerging because of these tariffs.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<h3 class=\"standard-heading\"><span><span><span><strong><span><span>Cancellations ahead?<\/span><\/span><\/strong><\/span><\/span><\/span><\/h3>\n<p><span><span><span><span><span><span>The Trump administration is using tariffs as a tool to level the playing field with key trading partners, said Basu. He says while economists often view tariffs as bad news, a strategic move to push other countries to lower their own trade barriers could be beneficial \u2014 if it works.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cThis might be a mechanism by which to really lower tariffs against U.S. exports,\u201d said Basu. \u201cIf that\u2019s the end game here, to use these reciprocal tariffs to do that, to chisel away and hammer away at tariffs against our exports, as an economist, I of course love that.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<figure class=\"image-right inside_story\">\n<div class=\"figure_content\">\n<div><img decoding=\"async\" alt=\"Headshot of a man with silver hair.\" data-imagemodel=\"169647\" src=\"https:\/\/imgproxy.divecdn.com\/ZyYbZTqXpj5yu5CAnXWaLvTJOrZlGSyHlRG27xvfOB0\/g:nowe:196:0\/c:1462:1828\/rs:fit:0:860\/Z3M6Ly9kaXZlc2l0ZS1zdG9yYWdlL2RpdmVpbWFnZS9LZW5fU2ltb25zb25faGVhZHNob3RfU1VNc05LZS5qcGc=.webp\"\/><\/div>\n<\/div><figcaption class=\"inside_story_caption\">\n<p>Ken Simonson<\/p>\n<p>Courtesy of AGC<\/p>\n<p>\u00a0<\/p>\n<\/figcaption><\/figure>\n<p><span><span><span><span><span><span>Trump said on Wednesday that companies can avoid tariffs by making their products in the U.S. Although there may be some examples of firms opening or expanding manufacturing facilities in the U.S. as a result of tariffs, these are likely to be outweighed by the value of projects that are canceled, said Simonson.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Tariffs are costly for contractors that have committed to a project at a <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/tariff-risk-tips-construction-contracts\/740768\/\" target=\"_blank\"><span><span><span><span><span><span><span>fixed or guaranteed maximum price contract<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> and have not locked in the price of materials. If contractors raise prices to account for tariffs, some owners may cancel, defer or scale back upcoming projects, said Simonson.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<section class=\"storylines-carousel-wrapper show-small hide-large\" id=\"mobile-carousel\"\/>\n<p><span><span><span><span><span><span>\u201cBut the biggest threat is from producers and logistics firms that face higher costs or lose export sales as foreign governments and consumers raise tariffs and nontariff barriers or boycott U.S. products,\u201d said Simonson. \u201cThese companies and their workers will reduce spending, including for construction.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>The suddenness of the implementation, with the tariffs going into effect immediately, could cause whiplash for certain economic actors, said Basu. He said there\u2019s usually a buffer between when a policy is announced and when it takes effect.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cThink long and hard about cashflow, and do not hold on to unnecessary cost centers for too long,\u201d said Basu. \u201cPut another way, contractors should focus on retaining cash.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Jed added there is no one-size-fits-all approach. Simply buying products and materials now to lock in the best price may not be the right strategy.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cWe let our teams work with the tools that we\u2019ve built internally to look strategically on a project-by-project basis of what makes the most sense,\u201d said Jed. \u201cDon\u2019t overreact.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<\/p><\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/www.constructiondive.com\/news\/trump-tariffs-construction-risk-liberation-day\/744334\/\" rel=\"nofollow noopener\" target=\"_blank\">This article was originally posted at Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] Listen to the article 8 min This audio is auto-generated. Please let us know if you have feedback. Owners &#8230; <a title=\"Sweeping new tariffs put future construction projects at risk\" class=\"read-more\" href=\"https:\/\/essential.construction\/news\/sweeping-new-tariffs-put-future-construction-projects-at-risk\/\" aria-label=\"Read more about Sweeping new tariffs put future construction projects at risk\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[457],"tags":[],"class_list":["post-29866","post","type-post","status-publish","format-standard","hentry","category-construction-dive","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/29866","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/comments?post=29866"}],"version-history":[{"count":0,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/29866\/revisions"}],"wp:attachment":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/media?parent=29866"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/categories?post=29866"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/tags?post=29866"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}