Tariffs bite: US domestic B&C sector struggles with rising project costs as aluminium prices mount

Concerns over slowing business continue to resurface as the United States’ steep tariffs on aluminium and steel imports weigh heavily on domestic manufacturing industries. While the packaging sector has repeatedly raised red flags, the building and construction industry is now warning of mounting challenges amid the newly raised 50 per cent import duty — an issue that remained unresolved in the US-China trade talks held on June 11.

American real estate and construction companies are largely drawing attention to the potential financial strain that aluminium and steel tariffs could impose, using hypothetical cost projections to illustrate the impact. In a recent webinar, Sarah Vakili, Senior Director of Business Planning and Strategy at Skanska USA Building, one of the nation’s largest and most financially sound construction firms, demonstrated that a 50 per cent blanket tariff on aluminium imports, combined with a 10 per cent reciprocal duty on all imports and an additional 30 per cent on Chinese imports, could add approximately USD 18 million to USD 22 million to the cost of a modeled USD 375 million healthcare project, equating to a 7 to 8 per cent hike in project cost from the previously estimated 4 to 5 per cent increase.

Sarah noted that nearly half of the added costs would arise from derivative products, such as window systems and fixtures containing aluminium and steel components. The tariffs applied to the metal content of these items under Section 232 of the U.S. Trade Expansion Act will significantly inflate their prices and, consequently, the overall project budget.