President-elect Donald Trump has promised to impose widespread tariffs on imported goods once he takes office, which could significantly increase construction material costs. While the full details of the plan remain uncertain, industry leaders are already bracing for potential impacts, particularly in commercial construction.
Experts, including Chris Fisher from consulting group Ducker Carlisle, emphasize that the scale and enforcement of these tariffs will determine how deeply construction is affected. If tariffs are announced, enforced, and followed through on, they could disrupt the industry by increasing costs for materials such as steel, plumbing components, HVAC parts, and coatings, many of which are sourced from China. Trump’s proposed additional 10% tax on Chinese goods could further exacerbate price increases. Red iron steel, often imported from China, is particularly vulnerable to price hikes, as China is the world’s largest crude steel producer. Such increases could counteract recent price reductions in steel, which had fallen by approximately 10% over the past year.
Electrical components, including transformers, circuit breakers, and switchgear, are also at risk of price hikes, potentially straining the already tight supply chains in sectors like data center and manufacturing construction. Despite these concerns, some materials sourced domestically, such as steel, cement, and aggregates, are less likely to be impacted by the tariffs. However, reduced competition from imports could still drive up the prices of domestically produced items, according to Ken Simonson, chief economist at the Associated General Contractors of America.
While tariffs could increase construction input costs — which have already risen nearly 40% since 2020 — some industry leaders question whether the proposed tariffs will be enacted or if they are simply a negotiating tactic. Anirban Basu, chief economist at Associated Builders and Contractors, speculates that the tariffs might serve as leverage for trade deals rather than sweeping measures, and he expects only modest increases in targeted tariffs.
The construction industry’s response to any new tariffs will depend on their implementation and enforcement, leaving many to await further developments as Trump’s plans unfold.
