{"id":156912,"date":"2025-11-11T11:50:59","date_gmt":"2025-11-11T11:50:59","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=156912"},"modified":"2025-11-11T12:04:47","modified_gmt":"2025-11-11T12:04:47","slug":"the-effect-of-trumps-tariffs-on-the-north-american-construction-industry","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/the-effect-of-trumps-tariffs-on-the-north-american-construction-industry\/156912\/","title":{"rendered":"The effect of Trump\u2019s tariffs on the North American construction industry"},"content":{"rendered":"

Raphael McMahon examines the effect of tariffs on key materials and how rising costs are impacting the construction sector and will ultimately affect house prices<\/h2>\n

Since his re-election in November 2024, trade tariffs have been a cornerstone of US President Donald Trump\u2019s agenda. On April 2, in fact, Trump announced a baseline tariff<\/a> of 10% on imports from all countries.<\/p>\n

However, countries deemed to have had unfavourable trade relationships with the US are subject to higher rates. 50% tariffs have been placed, for example, on Brazilian goods and 30% tariffs now apply to South African goods.<\/p>\n

Tariffs have also been enacted on specific goods coming to the North American country, irrespective of their origin, including 50% tariffs on all steel, aluminium and copper imports.<\/p>\n

Restrictions on steel and aluminium imports will, according to the White House<\/a>, \u201cprotect America\u2019s critical steel and aluminum industries, which have been harmed by unfair trade practices and global excess capacity\u201d, allow the president to \u201cadjust imports being brought into the United States in quantities or under circumstances that threaten to impair national security\u201d and counteract \u201cthe decline of domestic aluminum production\u201d.<\/p>\n

Higher material costs, higher house prices<\/h3>\n

Although confusion emerged following the introduction of Trump\u2019s measures, tariffs entail US-based importers paying more to import goods from foreign nations, which usually
\nleads to increases in the prices that regular consumers pay. In the case of the housing sector, for instance, more expensive imported materials mean higher building prices which, in turn, result in higher house prices for buyers.<\/p>\n

This process seems to be playing out in real time. A July 2025 report<\/a> from the Bank of America suggests that the cost of building a new home in the US could rise by 3%
\nby the end of the year, and that tariffs are largely to blame: \u201cWe expect tariffs to increase prices for HVAC [humidity, ventilation and air conditioning], plumbing, appliances, electrical components and flooring.\u201d<\/p>\n

\u201c[The tariffs] may have an additional material impact on the cost structure of homebuilding in the US, perhaps by another 4%-10% increase in material alone depending on geographic location and the type of material being sourced,\u201d said Stuart Siegel, CEO of real estate firm Engel & V\u00f6lkers\u2019 Americas operations, while in conversation<\/a> with Reuters.<\/p>\n

Why US construction is vulnerable<\/h3>\n

Tariffs are to blame for spikes in prices because the American housebuilding sector is not exclusively domestic. The National Association of Home Builders (NAHB) estimates<\/a> that $204bn worth of goods were used in the construction of new multifamily and single-family housing in the US during 2024, $14bn of which were imported from outside the US.<\/p>\n

The American construction industry, which employs over 8m workers<\/a>, is particularly vulnerable to the 50% steel tariff; 28% of its net shipments<\/a> in 2024 were iron and steel.<\/p>\n

Clement Cazalot, CEO of Boston-based Machinery Partner equipment supplier, told PBC Today that it is not just construction materials affected by the tariffs. A large proportion of the machinery used on construction sites is itself \u201cbuilt from imported steel\u201d.<\/p>\n

\u201cA bulldozer, crane or crusher can see costs rise 10%-30% rom tariffs alone \u2026 that means every job site pays more, not just for materials, but for the machines that move them,\u201d Cazalot affirmed.<\/p>\n

Turning to tech<\/h3>\n

Alex Sandoval, CEO of Allie AI, recommended, however, that the construction industry adapt to the changes in tariff policy by modernising through increased automation and
\ndigitalisation.<\/p>\n

\u201cTariffs create both risk and opportunity: for manufacturers in construction, the key is not simply to absorb the changes, but to build resilience. AI copilots help by capturing hard-won know-how and giving operators automated recommendations to ensure machines are always working at top performance,\u201d Sandoval told PBC Today.<\/p>\n

Those who leverage these tools, the CEO emphasised, will be those best positioned under the new tariff-based trade regime.<\/p>\n

Industry pushback<\/h3>\n

Regardless, many in the industry appear unwilling to accept the existence of \u201cthe new trade regime\u201d without pushback.<\/p>\n

According to Cazalot, organisations affected by the tariff increase are looking to negotiate with the Trump administration to lessen the impact of tariffs: \u201cThe big equipment associations \u2013 Associated Equipment Distributors and Association of Equipment Manufacturers \u2013 have been pushing for carve-outs. They argue tariffs on machines don\u2019t protect American steel; they only raise project costs.\u201d<\/p>\n

Although steel tariffs are likely to benefit<\/a> American steel producers, the American construction industry depends on foreign sources for specific types of steel, such as those
\nused in pipes and tubes that can withstand extreme temperatures and pressures, according to the Council on Foreign Relations<\/a>.<\/p>\n

Cazalot confirmed that, from the perspective of the American construction industry, tariffs are disadvantageous: \u201cDomestic steel mills don\u2019t make excavators or concrete plants. That work happens abroad. So tariffs raise costs but don\u2019t add supply where it\u2019s needed. Builders end up paying a tax without getting more equipment or materials.\u201d<\/p>\n

Canadian lumber<\/h3>\n

The rising cost of imported steel is not the only tariff-related strain on the American construction industry. This year, the US Commerce Department more than doubled<\/a> its countervailing duties and nearly tripled anti-dumping duties on Canadian softwood lumber, raising the overall tariff rate to 35% \u2013 up from 14.5% just months ago.<\/p>\n

Homebuilding that includes roofing, flooring and framing might be impacted by the sharp rise in softwood lumber prices. According to the Canadian government, whereas most American homes are framed with softwood lumber, the US does not produce enough material<\/a> domestically for its construction needs.<\/p>\n

The impact of such an increase on the American homebuilding sector is therefore likely to be far-reaching, given that approximately 30% of softwood lumber used in the US is imported, and Canada supplies approximately 85% of all US softwood lumber imports<\/a>.<\/p>\n

British Columbia Premier David Eby said in a written statement<\/a> that the Trump measures will be responsible \u201cfor driving up housing costs for Americans who voted for a president who promised to lower costs\u201d.<\/p>\n

Cazalot seems to agree, comparing the effect of the Trump-imposed tariffs on the construction industry to that of the Covid-19 pandemic.<\/p>\n

\u201cLook at Covid: prices rose, margins shrank, but costs never rolled back. Tariffs act the same way; if they go away, don\u2019t expect cheaper homes \u2013 only a pause before the next increase,\u201d he concluded.<\/p>\n

\n<\/div>","protected":false},"excerpt":{"rendered":"

Raphael McMahon examines the effect of tariffs on key materials and how rising costs are impacting the\u00a0 construction sector and will ultimately affect house prices.<\/p>\n","protected":false},"author":24,"featured_media":156917,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[304],"tags":[908,172825,173165],"stakeholder_rel_tag":[],"contributor_rel_tag":[173186],"class_list":{"0":"post-156912","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-planning-construction-news","8":"tag-economy","9":"tag-north-america","10":"tag-pbc-today-november-2025"},"acf":[],"yoast_head":"\nThe effect of Trump\u2019s tariffs on the North American construction industry | Planning, Building 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