by Calum Mair
Since his election win, President Trump has enacted and delayed a 25% tariff on Canadian and Mexican imports, as well as threatened and imposed several additional Chinese and global tariffs, further biting into the U.S. construction industry with project delays and increased steel and aluminum prices.
The tariffs on these imported materials will significantly raise construction input costs, impacting project budgets. Prioritizing how to source materials domestically or from countries with lower tariff rates is essential at this stage, and other businesses should do the same.
Diversifying suppliers, both internationally and domestically, can also reduce dependency on vulnerable trade routes. Companies should also consider stockpiling critical materials, leveraging technology for logistics, and focusing on no or low-tariff jurisdictions.
Trump’s stricter immigration policies could also exacerbate the workforce shortages in the construction industry, especially in states heavily reliant on immigrant labor. Businesses will likely need to invest in workforce development programs, including training initiatives to attract and upskill domestic workers. Expanding the use of automation and construction technology can also help offset labor gaps.
Although there may be challenges ahead, there are solutions businesses can adopt to help ease the burden they might cause, especially regarding global regulations and the uncertain future of interest rates.
The U.S. is expected to ease environmental, social, and governance (ESG) regulations in the coming year, which, along with deregulation in the energy sector, means lower costs for builders and others in the construction industry. However, many countries where the U.S. sources construction supplies—such as those in the European Union—still must abide by stricter ESG regulations, which could lead to increased costs for building supplies from overseas.
Investing in sustainable practices and materials now can reduce long-term reliance on high-cost imports and align with future regulatory trends. Proactively adapting supply chains ensures cost control while maintaining compliance and sustainability goals.
Although the Federal Reserve has forecasted a drop in interest rates over the next year, from around 4.5% at the end of 2025 to around 3.4% at the end of 2026, near-term rates are less certain. Interest rate volatility could affect businesses looking to start new projects in 2025 as higher rates make borrowing more expensive.
The uncertainty around interest rates poses challenges for businesses planning new construction projects, as fluctuating borrowing costs could impact financing. To navigate this, firms should prioritize cash flow management and explore alternative funding options to reduce dependency on loans. Locking in rates when favorable and staggering project timelines can also mitigate financial risks. Proactive planning ensures resilience against interest rate volatility while supporting project feasibility.
As the construction industry enters turbulent waters, so do suppliers, builders, and contractors alike. To prepare, they need to know what’s in store in the coming year and presidential administration. With a firm understanding of potential industry challenges, industry players will be better equipped to overcome them, leading to increased building projects and profits.
Calum Mair
Calum Mair is commercial director of North America for EPD.
