Tariffs: From Disruption to Operating Reality for Construction; What to Do Now

For construction companies, tariffs have become a direct input into bid accuracy and project margin. The current environment is challenging not only because rates are higher on core materials, but also because tariff programs can overlap and change assumptions quickly. That creates real risk in buyouts, equipment and parts sourcing, and specialty components—especially when the tariff impact is embedded upstream and doesn’t show up until invoices arrive.

Here’s a current snapshot of the tariff landscape most relevant to construction, followed by a brief mitigation playbook focused on practical actions.

The most relevant tariff developments for contractors

As of June 4, 2025, Steel and aluminum (Section 232) tariffs increased to 50% on steel and aluminum products and derivatives, applied to metal content only. Reciprocal tariffs may apply to non-steel/non-aluminum content, and exceptions were noted for the UK (25%) and Russia (200%). These Section 232 tariffs carry no allowable duty drawbacks, which means recovery after the fact is limited and reinforces the importance of getting it right on the front-end  classification, valuation, and documentation. If an importer cannot clearly document and separate the value of the steel/aluminum/copper from the rest of the assembly, Customs (CBP) may apply the 50% rate to the entire value of the invoice. Additionally, failure to provide the country of melt and pour (for steel) or smelt and cast (for aluminum) can indeed trigger a 200% tariff, but the mechanism and the specific metal involved matter.

In practice, this affects more than “raw steel.” It can show up in fabricated items, assemblies, and products where steel or aluminum is one component of a larger system.

Copper products

Effective August 1, 2025, semi-finished copper products (including pipes, wires, rods, sheets, tubes) and copper-intensive derivative products (including fittings, cables, connectors, and electrical components) were added to a 50% tariff, with no duty drawback.

For construction companies, this can materially influence MEP packages and specialty systems, where copper content is prevalent, and substitution may be difficult once design is set.

De minimis suspension

On August 29, 2025, the de minimis exemption (duty-free entry for goods valued at $800 or less) was suspended globally by Executive Order 14324. 

That matters for contractors that rely on smaller, time-sensitive purchases, replacement parts, specialty components, and expedited materials that historically moved under lower-touch import rules.

Country-specific and reciprocal tariffs

Several country-oriented tariff programs can influence landed cost including:

• China/Hong Kong/Macau: A May 12, 2025 development included a 90-day suspension of reciprocal tariffs with a combined example of 20% IEEPA + 10% reciprocal = 30%, while Section 232 steel and aluminum tariffs still apply. Duty drawback applies only to Section 301 tariffs in this area.
• Canada & Mexico: A March 4, 2025 action imposed 25% on all goods, then paused for USMCA-qualified goods as of April 2, 2025 (no end date noted). Drawback is allowed on USMCA-qualified goods only.
• “Fair and Reciprocal Plan”: As of August 1, 2025, the pause on a universal 10% tariff ended and individualized tariffs ranging from 11% to 50% rolled out to countries listed to specific countries maintain a baseline 10% (with specific treatment for Canada, Mexico, and China). Duty drawback is allowed here.  

For construction procurement teams, the takeaway is that the same part number can carry very different tariff costs depending on origin, how it’s classified, and how it’s valued, so blanket assumptions can lead to underbidding or avoidable overpayment.

Three-phase approach to mitigate impact

In working with many clients across industries on tariff mitigation, we recommend a simple, repeatable three-step approach: Compliance, Financial Management, and Improvement that helps reduce exposure without overcomplicating operations:

• Ensure the fundamentals are accurate and supportable by validating country of origin beyond certificates and applying the correct HTS classifications (since more than one code can apply depending on the product’s material, form, and function)
• Build visibility into impact by collecting and forecasting expected tariff costs so teams understand how tariffs flow through total landed cost and profitability; and finally,
• Implement targeted improvements, such as evaluating alternate sourcing by origin, using tools like FTZs/bonded warehousing or First Sale where appropriate, and tightening documentation and cost breakouts (including metal vs. non-metal content for Section 232 items) 

Convert tariff volatility into a managed process

In today’s tariff environment, the biggest risk for construction companies isn’t just paying more, it’s getting surprised after bids are signed, when tariffs show up in delivered costs, and there’s limited ability to recover them. A focused, disciplined tariff mitigation approach can help reduce exposure, improve forecasting, and strengthen documentation when questions arise.

Our Tariff Support Team supports construction companies to help pinpoint where tariffs are embedded in their supply chain, quantify the impact on active and upcoming work, and implement practical mitigation strategies that hold up operationally and from a compliance standpoint. Fill out the form to take control of your tariff exposure.