The U.S. construction industry has always been susceptible to the effects of global trade dynamics. In an industry built on steel, lumber, aluminum, and other raw materials, even small changes in tariffs can have a major impact on project budgets, timelines, and bidding strategies. As the global trade landscape continues to shift in 2025, many construction professionals are asking: How might new or ongoing tariffs affect the construction industry?
What Are Tariffs?
In the simplest terms, Tariffs are taxes on imported goods. When the U.S. imposes tariffs on materials like steel from China or lumber from Canada, those goods become more expensive to import — and that cost often gets passed down to subcontractors, materials suppliers, and, ultimately, whoever is paying for a given project.
Why Are Tariffs So Impactful in Construction?
Materials make up a significant chunk of a construction project’s cost, so even small price increases can be painful to businesses of all sizes. Higher prices for contractors means smaller profit margins, inflated bids, and fewer parties who are able to afford launching new construction projects – all of which equate to less revenue for construction professionals who won’t have as many jobs to work on.
The good news (especially if you’re a glass-half-full type) is that this manner of cost fluctuation is nothing new. Much like the real estate and stock markets, pricing in the construction industry is often affected by matters that are simply out of our control. We can’t change that, but we can turn to experienced peers in our construction community for support (connecting with PlanHub’s huge community of general contractors, subcontractors, and suppliers is a great start), learn what to expect, and adjust our own practices to stay the course.
What Can We Expect As a Result of New Tariffs?
Increased Material Costs – Common supplies like steel, aluminum windows, copper wiring, HVAC parts, and even tiles could see a spike in cost as a result of new tariffs.
Volatility in Lumber Pricing – The cost of Canadian softwood could easily be affected by agreement changes with our north of the border neighbors.
Supply Chain Delays – If increased pricing leads to challenges sourcing in-demand materials, contractors could face difficulties procuring the supplies they need in timely fashion – or at all. Unfortunately, any lasting shortages in materials could temporarily drive their costs up even more.
Project Delays and Tighter Budgets – If materials get more expensive, contractors might need to rebid projects, cut scope, or compromise their quality standards by opting for less expensive, lower-quality options.
Delayed or Canceled Projects – Developers may also scale back or delay new construction starts due to higher costs. In addition, business owners, municipalities and government agencies with fixed budgets might find themselves shelving or postponing public works projects altogether if they are simply no longer affordable..
How You Can Prepare Yourself for Rising Costs Pricing from Tariffs
Being prepared for potential challenges often means expecting the worst – which in this case, means significant potential cost increases on supplies and materials that are commonly needed for construction products. Whether that happens in six months, six years, or not at all, it can’t hurt to keep a few key strategies in mind:
- Source domestically when possible to avoid inflated pricing caused by tariff costs
- Lock in pricing early through bulk ordering or long-term supplier agreements
- Using smarter takeoff and estimating tools – like Takeoff by PlanHub – to measure and calculate costs more accurately, eliminating any chance of spending needlessly on excess materials
The Bottom Line
Ultimately, we can’t control diplomatic and political factors that can affect the cost of construction materials and supplies, making long-term planning and price consistency an uphill battle. However, by relying on smarter project management and takeoff tools like those available in PlanHub’s all-in-one platform, you can minimize the effect that cost increases may have on your business.
