President Trump has reinstated tariffs on steel and aluminum imports, imposing a 25% tax on steel and 25% on aluminum, eliminating all exemptions. While the goal is to strengthen domestic metal production, these tariffs are expected to raise costs and disrupt supply chains, particularly in construction and real estate.
For developers, contractors, and investors, this shift could mean higher prices, longer project timelines, and increased financial pressure. Understanding how these changes may impact the industry is crucial for staying ahead.
Rising Costs and Supply Chain Disruptions
Steel and aluminum are essential materials in construction, from structural frameworks to mechanical systems. With imports now taxed more heavily, material prices are expected to rise, putting pressure on project budgets. According to the U.S. Census Bureau and International Trade Administration, the U.S. imported 25.6 million metric tons of steel and 5.4 million metric tons of aluminum in 2024, with major suppliers including Canada, Mexico, and Brazil.
The elimination of exemptions means that even long-standing trade partners will face higher costs, potentially leading to supply shortages and price hikes. If domestic production cannot meet demand, construction firms may experience delays, increased costs, and contract renegotiations—challenges that could slow the pace of real estate development nationwide.
Passing Along the Cost
Higher steel and aluminum costs will likely increase overall construction expenses, with contractors passing those costs onto project owners and consumers through higher bids. Rising material prices could also cause potential delays as developers assess additional economic challenges like high interest rates and labor shortages.
What Developers, Contractors, and Investors Should Do
With material prices expected to rise, developers and contractors must act now to prepare for potential cost increases. Reevaluating project budgets, renegotiating contracts, and securing supply agreements early could help lock in pricing before tariffs fully take effect.
Additionally, staying informed about trade policy developments is crucial. Trump has hinted at additional tariffs on semiconductors, cars, and pharmaceuticals, which could create further economic ripple effects.
At Moran Consultants, we specialize in helping clients navigate market shifts, manage costs, and strategize for long-term project success. If you’re concerned about how these tariffs could impact your development, let’s start a conversation today. Now is the time to prepare for what’s ahead.