Steel, Aluminum Tariffs Spark Volatility in Construction Market

by Christopher Brinckerhoff | 24 March 2025 6:00 am

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The construction industry in the United States is navigating a complex and shifting landscape shaped by ongoing tariff disputes, potential new port fees, and their direct impacts on material costs and project timelines.

In “Steel & Aluminum Tariffs Uncovered: What This Means for the Future of Metal Construction and Design,”[2] a webinar hosted by Metalcon on March 19, experts from various sectors shared their perspectives on the implications of these trade policies, highlighting both the risks and opportunities for contractors in the U.S. construction market.

Ken Simonson, chief economist at Associated General Contractors of America (AGC)[3], analyzed how tariffs affect the construction sector. Simonson explained there are currently 25 percent tariffs on aluminum and steel, as well as tariffs on Chinese goods. The situation is further complicated by tariffs on Canadian goods not included in the U.S.-Mexico-Canada Agreement (USMCA). “It’s a very tricky, complex proposition to figure out exactly what is eligible under USMCA,” he says.

The uncertainty surrounding these tariffs has created significant challenges for contractors who rely on imported materials.

“I remain a chronic optimist, and I do think the economy has shown tremendous resilience in the last five years,” Simonson says. “It has a chance of avoiding recession, but I feel like the risks have gone up a lot, and particularly for construction, that construction does depend more on imports than many industries. Even contractors who are buying from U.S. producers are going to feel the impact as those producers raise their prices in tandem or at least close to matching the imported prices, or a surge of orders from U.S. producers to get away from the tariffs means higher costs, longer delivery times.”

Simonson also pointed out the ripple effects of potential retaliatory tariffs, which could further disrupt U.S. exports. These disruptions, Simonson warned, could lead to reduced demand in some sectors that export goods, such as food processing and manufacturing, which may cause construction projects to be delayed or canceled.

“There is a high risk on that,” Simonson says.

Simonson stressed the uncertainty is particularly challenging for contractors already facing rising material costs and tight margins.

“I wish I could provide more certainty; I know our members would certainly like that as they prepare bids or prepare to pay the costs of things that they already committed to buying and installing, but there’s just more uncertainty than I’ve seen in my almost 24 years with AGC,” Simonson says.

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Other experts provided perspectives on the broader effects of tariffs on the construction market. Robert Tiffin, president of the Metal Building Contractors and Erectors Association (MBCEA)[5], says contractors are increasingly looking to diversify their portfolios in response to the uncertainty around tariffs. “Contractors and erectors are looking for diversification, but there’s some uncertainty there,” he says.

According to Tiffin, some contractors who have shifted to multi-family construction are now considering returning to the metal building business as the demand for multifamily projects continues to taper off. Some specific types of projects, such as data centers and reroofing projects, are growth areas, Tiffin says. “So, there’s work to be had, but it’s not the traditional metal building increasing warehouses. At this point, in general, it’s optimistic.”

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Tony Bouquot, general manager at the Metal Building Manufacturers Association (MBMA)[7], echoed the cautious tone regarding tariffs. “I am hearing caution. I am hearing a lot of questions,” he says. “I’ve probably taken more questions on tariffs in the last three weeks than I took the prior three years, and they’re asking about what’s happening; they’re asking about what MBMA is doing about it.”

While he has not yet seen price increases announced among MBMA members, Bouquot says many are preparing for the possibility of future hikes, depending on how the tariff situation evolves.

“Folks are letting their customers know that it’s an evolving situation and that they expect that there might be changes on the way,” Bouquot adds.

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Keith Shuttlesworth, chief commercial officer at Flack Global Metals[9], Scottsdale, Ariz., added that the volatility in steel prices, caused by tariffs and other factors, has made it difficult for contractors to quote long-term projects with any certainty. The price of hot-rolled coil steel, for example, increased by nearly 40 percent in just a few months.

“I think that this has generated a lot of uncertainty in the market overall because nobody knows where it’s ultimately going to end up. But what we do know is that it’s caused prices to rise quite significantly since January.”

Price volatility creates challenges for contractors and others in the supply chain who must navigate fluctuating material costs and protect their margins. “There are tools out there to help … manage the forward curve to help create price certainty, but it is a huge dilemma,” Shuttlesworth says.

Simonson asked Shuttlesworth how long it typically takes for cost increases to trickle down to completed building components that contractors purchase.

“There is a lag from the mill production and the mill announcements to the actual implementation in the market, Shuttlesworth says. “We’re in the service center space, so it depends on what inventory is out there and how aggressive competitors are to move products during that implementation time. I think we’ve seen the market finally catch up to some of those moves from the January, February time frame, but it normally takes a month or two for [cost increases] to fully be implemented into the supply chain.”

Another concern is the potential for additional fees on Chinese-made ships calling at U.S. ports. Simonson highlighted that most freight, even when operated by European or Japanese shipping lines, is often carried by vessels built in China. “This potentially will add even more cost to the materials that are used in construction,” he says.

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Ian Waddell, regional manager at JFE Shoji America LLC[11], Long Beach, Calif., says, “We’re keeping an eye on things with regards to [the proposed port fees on Chinese ships] and try to stay close to developments on that. But it does seem like it’s difficult to understand what it could look like. We’re asking our ocean freight companies and people that move steel for us into the United States to also keep a close eye on things. And I think if they have the opportunity to use ships that aren’t made in China, I think that’s something they’re trying to take advantage of as well.”

For more information about tariffs and the metal construction industry, read previous articles:

• Tariffs at Play as Construction Input Prices Rise 0.6 Percent in February[12]
• Five Ways President Trump’s Policies Could Reshape the Construction Industry[13]
• Steel Tariffs Fuel Price Surge; Construction Starts Decline[14]
• Steel Prices Spike: 25 Percent Tariff Threatens Even More Increases[15]
• How Contractors Can Plan for Impact of Steel, Aluminum Tariffs[16]

Source URL: https://www.metalconstructionnews.com/articles/features/steel-aluminum-tariffs-construction/

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