Tariffs: The Wild Card That Could Shake Up Your Construction Project
In the world of commercial construction, staying ahead of the curve means understanding the unpredictable forces that can impact your bottom line. One of the biggest wild cards? Tariffs. These taxes on imported goods can send shockwaves through project costs, timelines, and overall market dynamics. With changes looming on the horizon, it's more important than ever for owners, developers, and contractors to be proactive, strategic, and prepared for what lies ahead.
A look back at recent history shows us just how significant the impact of tariffs can be. In 2018, tariffs on steel and aluminum caused the price of steel to rise by over 25% within months, forcing many projects to revisit budgets, alter scopes, and seek out alternative materials. Similar challenges have cropped up during other trade disputes, with price volatility making it difficult for industry stakeholders to forecast and manage costs (Construction Dive, February 2025).
Though a lot remains to be determined—let's talk about how you can protect your project from the potential impacts of tariffs and market uncertainty. Here are five resourceful strategies to help you safeguard against risk and keep your projects on track:
Think Beyond One Supplier: Diversify Supply Chains
Proactively diversifying supply chains can help mitigate the impact of tariffs. Owners, architects, and contractors should explore sourcing materials from a broader range of suppliers, both domestically and internationally. Building relationships with multiple vendors can reduce dependency on a single source and provide greater flexibility in the face of price fluctuations or shortages. For instance, at MAREN Construction, we are leaning into our relationships with multiple trade partners in each scope of work to stay proactive and further diversify our supply chains.
Lock it Down Early: Strategic Procurement Wins
Secure key materials early in the project lifecycle, especially if tariff changes are anticipated. Consider early-release packages for critical scopes or Letters of Authorization (LOAs) to release key trades to lock in costs and protect budgets from sudden spikes. In our case, we are proactively identifying items subject to tariffs and working to lock in those trade partners early where possible with a Letter of Intent (LOI) to release submittals for review and approval. This will allow us to secure pricing earlier in the process. In these unique times, in some cases a subcontract is not enough--getting shop drawings approved and material on order is what locks in pricing with manufacturers.
Choose Allies Wisely: Resourceful Partnerships Matter
Engaging a general contractor who understands the market can be invaluable. Collaborative partners bring resourceful solutions like cost-effective alternatives, value engineering, and streamlined procurement processes that help keep projects on track. This is likely one of the most important factors! We can't stress this enough. Truly collaborative partners, like our team at MAREN, will be able to act in your best interest when brought to the table early, which is when most of the decisions that will have an impact on the cost of your project are made.
Plan for the Unexpected: Contingency is Key
Develop a risk management strategy that includes contingency planning. Allocate additional funds for potential cost increases and work closely with project teams to identify critical milestones and adjust schedules as needed. One way we are approaching this is by including or recommending an escalation contingency. This factor may vary depending on the size and scope of your project but should certainly be discussed.
Stay Sharp and Adaptive
Knowledge is power. Actively monitor ongoing trade policy developments and potential tariff changes to make informed decisions. Be ready to adapt project plans and budgets based on evolving market conditions. Our MAREN team has been actively collecting vital information from industry trade associations, trade partners, suppliers, clients, and other pertinent resources to remain on the forefront of the trade discussions. Being able to anticipate changes on the horizon puts us in a great position to advise our clients.
The takeaway? As the commercial construction market navigates future tariffs, owners and developers who adopt a proactive, strategic approach will be better positioned to mitigate risks and ensure successful project outcomes. While challenges are inevitable in a dynamic market, careful planning, diversification, and collaboration can drive resourceful solutions and sustain growth in the face of uncertainty.
Our Advice:
Selecting a general contractor early is always encouraged but is even more valuable for owners and developers during these uncertain times. Our most successful projects are a true collaboration with the entire project team where we can bring value early in the process and help our clients and developers navigate the changing landscape of construction costs.
About the Author
Erin Miller serves as Preconstruction Manager for MAREN Construction. With over a decade in commercial construction, Erin brings a wealth of knowledge and expertise. From her time as both Preconstruction and Project Manager to owning her own successful general contracting business, she has worked on a diverse range of projects in the office, restaurant, retail, and wellness sectors. Erin brings valuable experience and a keen eye for detail to her role in preconstruction.
Reference
Construction Dive. (2025). Contractors brace for steel and aluminum tariff impacts. Retrieved from https://www.constructiondive.com/news/contractors-brace-steel-aluminum-tariff-impacts/