{"id":30813,"date":"2025-06-08T17:30:05","date_gmt":"2025-06-09T00:30:05","guid":{"rendered":"https:\/\/essential.construction\/news\/new-steel-aluminum-tariffs-will-push-construction-costs-higher\/"},"modified":"2025-06-08T17:30:05","modified_gmt":"2025-06-09T00:30:05","slug":"new-steel-aluminum-tariffs-will-push-construction-costs-higher","status":"publish","type":"post","link":"https:\/\/essential.construction\/news\/new-steel-aluminum-tariffs-will-push-construction-costs-higher\/","title":{"rendered":"New steel, aluminum tariffs will push construction costs higher"},"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\">6 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\/v1749134535\/news\/text_to_speech\/new-steel-aluminum-tariffs-push-construction-costs-higher_thtkhz.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>New tariffs on foreign steel and aluminum will raise construction costs further, adding to price spikes triggered by an <\/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>initial 25% tariff<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> on the materials earlier this year, according to a June 3 industry webinar hosted by Skanska USA.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>President Donald Trump increased <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.manufacturingdive.com\/news\/trump-increase-steel-tariff-nippon-us-steel-pennsylvania\/749451\/\" target=\"_blank\"><span><span><span><span><span><span><span>steel and aluminum tariffs from 25% to 50%<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> on Wednesday, doubling down on a strategy that has reshaped construction supply chains since his administration took over. <\/span><\/span><\/span><\/span><\/span><\/span><span><span><span><span><span><span>Only the United Kingdom is exempt from the hike until July 9, per the U.S.-U.K. Economic Prosperity Deal.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>The move will inflate material costs across a range of commercial building materials, at a time when many projects stand on <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/private-construction-pullback-overall-spending\/749643\/\" target=\"_blank\"><span><span><span><span><span><span><span>shaky financial ground<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>, according to panelists.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cWe\u2019re still digesting the most recent announcement of the steel and aluminum tariffs doubling,\u201d said Rob Cantando, national director of strategic supply chain at Sweden-based developer and builder Skanska. \u201cWe\u2019re going to be working with our supply chain partners to assess that impact over the coming weeks.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>In one case study shared by Skanska, the new tariffs could add around $22 million to a $375 million healthcare development. Nearly half of that jump is tied to derivative components that embed steel or aluminum in their assemblies, according to Skanska. Panelists added these cost increases could even jump as high as 8%.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>But other categories are showing resistance to <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/ppi-construction-costs-tariffs-materials\/748328\/\" target=\"_blank\"><span><span><span><span><span><span><span>price swings<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span>, said Cantando. Several manufacturers that announced price hikes earlier in the year, particularly of drywall, lumber and steel studs, have since scaled back further increases.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cMany of those markets that shot up early when the first round of tariffs were announced are giving back some of those gains as these new tariff policy changes are accounted for. In addition, manufacturers and suppliers are taking action to remain competitive,\u201d said Cantando. \u201cMany of them are shifting sourcing and materials to minimize the impact of tariffs. In some cases, tariffs are being partially absorbed by the supply chain.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<h3 class=\"standard-heading\"><span><span><span><strong><span><span>Price uncertainty<\/span><\/span><\/strong><\/span><\/span><\/span><\/h3>\n<p><span><span><span><span><span><span>The result is an unpredictable pricing climate. For now, structural steel escalation is hovering around 5% to 8%, but that could rise quickly, said Cantando.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Coil-based steel products, including hollow structural sections and bar grating, have already surged by as much as 50% since January. Midwest aluminum premiums jumped 54% following Trump\u2019s announcement last week of the new tariffs, he added.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>To stay ahead of volatility, suppliers have been reworking logistics. Kawneer, a Norcross, Georgia-based manufacturer of commercial construction products, has begun rerouting cross-border contracts and adjusting production footprints across North America to avoid tariff exposure, said Sarah Andreasen, director of North American sales at Kawneer.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Kawneer\u2019s architectural aluminum product range includes windows, doors, framing systems, curtain wall systems and railings. The firm\u2019s products are used on nonresidential buildings such as stadiums, offices, schools, retail and healthcare construction, according to the company.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cFor us, it\u2019s been all about rediverting our supply chain,\u201d said Andreasen. \u201cWe have had to do a lot of work, set up production capability in different plants so that we can mitigate those types of transactions from tariffs.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>On the steel side, firms such as SteelFab, a Charlotte, North Carolina-based structural steel fabricator, are working directly with owners and general contractors to create bundled purchasing agreements, said Chris Gregory, executive vice president at SteelFab. Gregory recommended locking in pricing across multiple upcoming projects by combining expected orders into a single package.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cPackage projects together. Say \u2018It\u2019s not just 1,000 tons we\u2019re buying, we\u2019d like 15,000 tons. What kind of deal can you structure for us to lock in price and help us with the schedule?\u2019\u201d said Gregory. \u201cThat has saved a tremendous amount of money this first quarter that goes directly to the owners.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<section class=\"storylines-carousel-wrapper hide-small show-large\" id=\"desktop-carousel\"\/>\n<h3 class=\"standard-heading\"><span><span><span><strong><span><span>Risks abound<\/span><\/span><\/strong><\/span><\/span><\/span><\/h3>\n<p><span><span><span><span><span><span>However, risks still remain, said panelists. In certain cases, tariff impacts won\u2019t appear on an invoice at all, said Cantando.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>For instance, if the cost of a component rises due to reshuffled sourcing or overseas market constraints, there\u2019s rarely a clean paper trail.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cA component costs $100 but because of tariffs, it now costs $150. My supply chain team quickly gets to work to try to find an alternate source. Let\u2019s say they find a source that\u2019s $125,\u201d said Cantando. \u201cYou can argue that the $25 increase was a result of tariffs. But you\u2019re not going to have a document that shows that because there\u2019s no tariff that\u2019s applied to it.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Tariffs&#8217; impacts are further complicated by shifting domestic capacity. While U.S. steel mills are currently running below peak capability, at around 75%, certain segments have already seen stretched lead times, said Gregory. Aluminum smelting capacity, idled in recent years, will also be harder to ramp back up, said Andreasen.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cI do think it\u2019s something that we\u2019re going to have to watch pretty carefully,\u201d said Andreasen. \u201cI think that\u2019s a challenge that we\u2019ll continue to watch on the horizon.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>In the meantime, executives should continue to develop contingency planning and contract strategies. Panelists during the session advised clients to <\/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>revisit contracts<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> to help mitigate risk.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cYou might want to consider establishing unit pricing, or index-based pricing, for products where the supply chain is suggesting that firm fixed pricing won\u2019t reflect future tariff policies,\u201d said Sarah Vakili, senior director of business planning and strategy at Skanska. \u201cOf course, stay informed and be willing to adapt.\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\/new-steel-aluminum-tariffs-push-construction-costs-higher\/749931\/\" 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 6 min This audio is auto-generated. 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