The Trouble With Tariffs: Understanding The Impact On A Construction Contract

The tariffs enacted and proposed by the Trump administration have created a cause for concern among industries worldwide, and the construction sector is no exception. Imported goods are often essential to a construction project, and tariffs can have a dramatic effect on project costs and completion.

Understanding the impact of these tariffs—and proactively managing risks through properly drafted construction contracts—can help parties on all sides of a construction project avoid financial difficulties and potential project delays.

How Tariffs Affect the Construction Industry

The construction industry relies heavily on a global supply chain, sourcing materials like steel, aluminum, lumber, and various other raw products from around the world. When tariffs are imposed, the cost of these imported goods rises. Inevitably, such cost increases may cause budget overruns, delays, and ultimately, more expensive final products.