According to a March 2025 article from FMI, the construction and building products industry is facing a dynamic environment due to newly implemented tariffs on steel and aluminum, particularly 25% tariffs on imports from countries like Canada and China.
These tariffs are creating both challenges and opportunities for manufacturers, forcing them to reassess their supply chains, investment strategies, and competitive positions. While some companies can leverage pricing power, others are grappling with rising costs and supply chain disruptions. The ability to adapt is critical to success, as companies need to adjust to fluctuating material costs, projected to rise by 8.2% for steel and 5.7% for aluminum.
For U.S.-based manufacturers sourcing domestically, the tariffs provide a competitive edge, as they can capitalize on higher prices for imported goods. However, those relying on foreign raw materials face increased costs and may need to seek new suppliers or consider reshoring. Foreign manufacturers exporting to the United States are finding it harder to compete due to higher costs, but many are responding by investing in U.S.-based operations to bypass tariffs and enhance supply-chain efficiency.
The construction industry is also impacted by higher material costs, leading to potential project delays and budget overruns. Developers and contractors must adapt by reassessing budgets, exploring alternative materials, and securing long-term contracts. The focus on domestic production is driving interest in U.S. manufacturing, creating growth opportunities for investors, particularly in industrial real estate and workforce expansion.
Overall, the construction and building products industry must navigate this tariff-driven landscape by being adaptable, adjusting supply chains, and investing strategically to stay competitive.
Reference
Trombitas P. (2025) Key considerations for building product manufacturers around tariffs. FMI. March.