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.
Aluminium consumption in the B&C sector: pre- vs. post-tariff trends
In August 2024, Ducker Carlisle had projected a 9 per cent increase in aluminium use in the building and construction (B&C) sector by 2027 compared to 2022 levels. In 2022, the sector consumed around 1.13 million tonnes, which grew over the next two years to an estimated volume of 1.6 million tonnes in 2024.
The survey also revealed that every USD 100,000 in residential and nonresidential spending would translate to approximately 126 pounds and 183 pounds of aluminum use, respectively. Furthermore, 62 per cent of building and construction professionals (including 79 per cent of architects) said they expect their aluminium use to grow in the coming years, identifying aluminium to be the most-used item among a dozen other building materials
Ducker Carlisle survey also reported that extruded aluminium profiles, primarily used for window frames, make up the largest share of aluminium products used in the B&C sector. These are followed by aluminium sheets, commonly applied in cladding and gutter systems.
According to Aluminum Association data, the building and construction is the third-highest end-user sector for North American aluminum producers, representing 13 per cent of overall shipments in the region, after transportation and packaging.
However, the outlook has softened in recent months, partly due to high tariffs, elevated employer tax rates, and rising unemployment in several US regions. The new 50 per cent tariff on aluminium and steel imports have doubled pre-existing duties, leading to premium surge to USD 1,289.27 and increase raw material costs for the US construction industry. Result? Project delay and contract cancellation.
Broader economic factors contributing to the B&C market downsize
Sarah Vakili also held other economic factors responsible for slowing construction activity, especially residential construction. Elevated mortgage rate, recession, and inflation of real estate prices have made the buying sentiment weak. The squeeze is particularly acute for entry-level homes.
In April 2025, the National Association of Home Builders’ Housing Market Index (HMI) was 40, compared to 51 during the same month of the previous year. Later in June 2025, the construction MMI (Monthly Metals Index) recorded a M-o-M drop of 2 per cent, with the new 50 per cent tariff taking effect.
Adapting to uncertainty: strategic workarounds emerge
Despite these challenges, the US real estate companies and aluminium suppliers are not sitting idle. Many are proactively exploring solutions to navigate the tariff landscape. One such strategy involves rerouting cross-border transactions for billet (semi-finished aluminium bars) to avoid steep tariffs.
Kawneer, a leading aluminium products supplier, is among the companies adjusting their sourcing strategies. Sarah Andreasen, who oversees North American sales for the firm, confirmed that they are rerouting billet supplies to mitigate tariff impacts.
Andreasen also highlighted the importance of early coordination with contractors to secure optimal pricing and favourable trade terms. According to her, while construction firms and suppliers may not influence federal trade policy, they can shape project outcomes through bundled orders, flexible product specifications, and transparent communication.
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