Why Tariffs Matter in Construction — And What You Can Do About It
- Bill Shapcott
- Jun 26
- 2 min read
In today’s construction economy, you don’t have to be an economist to feel the effects of tariffs.
If you're a contractor, GC, or specialty trade owner, chances are you’ve already been hit by the fallout—whether it’s in your material quotes, project margins, or jobsite timelines.
But understanding why tariffs matter is only half the battle. The real edge comes from knowing how to respond.
What’s Really Going On?
Over the past few years, tariffs on imported goods like steel, aluminum, and lumber have caused sharp swings in material pricing. And it’s not just the big-ticket items—many components sourced globally (copper wiring, fasteners, insulation) are caught in the ripple effect.
This creates four major pain points for construction businesses:
Material Cost Volatility: You bid a job at one number, then watch your material supplier revise pricing two weeks later.
Unpredictable Estimates: Project estimating becomes a gamble, and competitive bids get riskier.
Cash Flow Pressure: Rising costs mean tighter margins, delayed payments, and a greater chance of being out of pocket.
Supply Chain Disruptions: Lead times stretch, jobs stall, and clients get frustrated.
The result? Owners are forced to absorb more risk, fight harder for profitability, and often delay key decisions like hiring, scaling, or investing in systems.
So What Can You Do?
Here are five practical moves construction leaders can make now:
1. Lock in Material Pricing Early - Where possible, work with suppliers to pre-purchase or lock in pricing at bid stage—even if it means negotiating smaller upfront orders.
2. Add Escalation Clauses to Contracts - Protect yourself with language that allows for cost adjustments tied to major material indexes or tariffs. Many owners will accept this if it’s communicated clearly and early.
3. Build a Contingency Buffer - When margins are tight, don’t assume best-case. Bid with a smart buffer based on recent price trends to avoid losing money later.
4. Track Job Cost Trends Internally - If your job costing system doesn’t give real-time data on material trends and budget slippage, now’s the time to upgrade it.
5. Prioritize Jobs with Reliable Supply Chains - Not all work carries the same exposure. Be strategic about the types of projects you chase—or subcontractors you rely on.
Final Thought: Uncertainty Is the New Normal
Construction has always been a high-stakes game. But in 2025, the winners won’t just be the ones who build the best—they’ll be the ones who plan the best.
Tariffs may be outside your control, but how you respond isn’t.
If you’d like to schedule a quick 25-minute briefing I can walk you through our Q2 Executive Report. . . . . It outlines the trends already putting pressure on many construction pros across the nation.
Feel free to email me or drop a comment below. We put this together to help contractors like you stay one step ahead.
Let’s keep building smarter.
—
Bill Shapcott
Co-Founder & Managing Partner
Shapcott & Lauber, LLC
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Who We Are
Shapcott & Lauber, LLC (S&L) is a boutique management consulting firm that specializes in helping construction contractors regain financial stability, improve job performance, and install the operational systems needed to protect profitability.
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