What Countries Have Tariffs Against the United States? Construction Impact

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Key Takeaways

• Canada and Mexico lead retaliatory tariffs: Combined, they account for 32% of U.S. construction material imports—steel, aluminum, lumber, and cement are all in the crosshairs
• Your material costs already reflect trade tensions: NAHB estimates that lumber price spikes (driven in part by tariffs and market conditions) added approximately $18,600 to the cost of a single-family home as of January 2022
• China’s response hits specialized equipment: Tariffs on construction machinery, HVAC systems, and electrical components create supply chain bottlenecks most contractors aren’t prepared for
• Bottom Line: Construction CFOs who treat tariffs as a pricing problem rather than a supply chain strategy problem will watch margins evaporate faster than their optimistic bid estimates

Remember when your biggest material cost worry was whether the lumber yard would deliver on time? Those were simpler days. Now you’re monitoring international trade policy like it’s the weather forecast—because it basically is. Except instead of predicting rain, you’re trying to figure out if Canadian steel is about to get 25% more expensive next Tuesday.

Welcome to construction in the age of tariff whiplash, where the only thing more volatile than material prices is the geopolitical relationship status between major trading partners.

Retaliatory Tariffs

When the U.S. imposes tariffs, our trading partners don’t exactly respond with thank-you notes. They retaliate—and construction materials are often their favorite targets because they hit hard, fast, and politically. According to data from the Office of the U.S. Trade Representative, here’s where things stand:

Canada: The Polite Neighbor with a Strict Trade Policy

Canada is the largest single supplier of steel to the U.S., accounting for about 23% of U.S. steel imports in 2024. Canada remains the dominant source of U.S. softwood lumber, supplying approximately 74% (by value) in 2024. When they get upset about U.S. tariffs (which has happened repeatedly since 2018), they respond with tariffs on U.S. steel, aluminum, cement, and construction materials.

Current impact: NAHB estimates from January 2022 showed that lumber price spikes (reflecting both tariffs and broader market conditions) increased the cost of a typical single-family home by approximately $18,600 and added roughly $10,000 to apartment construction costs. That’s not a rounding error—that’s a margin problem that shows up on every project estimate you run.

What gets hit: Dimensional lumber, plywood, oriented strand board (OSB), steel reinforcement bars, aluminum extrusions, ready-mix concrete components. Basically, if you frame with it or pour with it, Canada’s probably got leverage over it.

Mexico: Your Second-Largest Source of Construction Material Challenges

Mexico is a top supplier of construction materials to the U.S.. When U.S. tariffs go into effect, Mexico responds with tariffs on American steel products, flat glass, and construction equipment.

Current impact: Mexican tariffs on U.S. exports don’t directly raise your material costs, but they throttle cross-border construction supply chains that many contractors depend on for fabricated steel, specialized concrete forms, and cost-effective project components.

Supply chain reality check: If you’re working on projects near the southern border or sourcing prefabricated components from Mexican suppliers, tariff uncertainty creates delivery delays and pricing volatility that makes accurate project budgeting feel like astrology.

China: The Supplier You Can’t Replace

China accounts for approximately 27% of U.S. construction material imports, but here’s where it gets interesting—they dominate specific categories where U.S. contractors face significant supply dependencies.

Current impact: U.S. tariffs on Chinese goods (ranging from 7.5% to 25% depending on product category) triggered Chinese retaliatory tariffs on U.S. construction materials and equipment exports. The real problem? Many specialized construction components have no viable alternative suppliers, creating bottlenecks contractors can’t navigate around.

What this means for you: That high-efficiency HVAC system you specified? The electrical panels for your commercial project? The crane components for your high-rise? All potentially subject to tariff-driven price increases with limited substitution options.

The European Union: Calculated and Strategic

The EU doesn’t export massive volumes of construction materials to the U.S., but when they retaliate against U.S. tariffs, they target specialized products: high-grade steel for commercial construction, architectural glass, precision tools, and construction equipment. Note that EU’s 2018 steel and aluminum retaliation was modified following the October 30, 2021 U.S.–EU steel and aluminum arrangement, though specific tariff measures continue to evolve.

The EU strategy: Unlike Canada’s broad-based response, EU tariffs are surgical. They target products where European manufacturers have competitive advantages and where alternative suppliers are limited. For large commercial and infrastructure projects requiring specialized materials, EU tariffs create procurement complications that project managers discover too late.

The Ripple Effects Construction CFOs Actually Care About

Tariffs aren’t just line items on a materials invoice—they’re supply chain disruptors, margin killers, and risk factors that show up in three places:

1. Job Cost Estimates That Age Poorly

You bid a project in Q1 based on Q4 pricing, and by the time you start procurement in Q2, tariff policy has changed twice and your steel costs are up. Congratulations—you’re now funding the project from your operating margin.

CFO reality: Contractors consistently report that material cost volatility (largely driven by tariffs and supply chain disruptions) has forced significant increases in contingency reserves. That’s capital tied up in risk mitigation instead of growth.

2. Supplier Relationships Under Pressure

Your go-to steel supplier who’s been reliable for fifteen years? They’re now scrambling to source from non-tariffed countries, which means longer lead times, inconsistent quality, and prices that fluctuate weekly.

What’s changing: Smart contractors are diversifying supplier relationships and building flexibility into procurement strategies. The problem? That takes time, working capital, and relationships you don’t have. Meanwhile, projects still have delivery deadlines.

3. Foreign Exchange Exposure You Didn’t Sign Up For

When tariffs raise Canadian lumber prices and the U.S. dollar strengthens against the Canadian dollar, your net material cost increase depends on factors unrelated to construction fundamentals.

The fun part: You’re now managing currency risk on top of tariff risk on top of the usual construction risk. If this sounds like you need a treasury function for your construction company, you’re starting to understand why larger contractors are hiring finance professionals with banking backgrounds.

Strategic Responses That Aren’t “Hope It Gets Better”

It’s time to think ahead, not just wait and see. Here are some guidelines for that.

Proactive Material Sourcing (Before You Need It)

The contractors who are navigating tariff uncertainty best aren’t waiting for material prices to stabilize—they’re locking in supply agreements with multiple sources, prebooking critical materials when tariff windows open, and building strategic inventory of long-lead items.

What this looks like: If you know a major infrastructure project is starting in eight months and steel tariffs might increase, you’re buying and storing steel now. Yes, that ties up working capital. No, it’s no longer optional if you want predictable margins.

Cost Escalation Clauses (That Actually Work)

Including generic price escalation language in contracts is table stakes now. The difference between contractors who are surviving and those bleeding margin? Their escalation clauses are specific, defensible, and tied to published indices for tariff-impacted materials.

Template language isn’t enough: You need clauses that specify which materials qualify for price adjustments, what triggers an adjustment (published tariff announcements, not just price increases), and how adjustments are calculated and documented.

Value Engineering with Tariff Intelligence

When Canadian lumber gets expensive, contractors with strong engineering relationships pivot to steel framing. When steel tariffs spike, they shift to engineered wood products. The key word? Before you’re locked into a project spec.

CFO insight: This requires upfront investment in preconstruction planning and supplier relationship management. But contractors who treat value engineering as an ongoing strategy rather than a crisis response are maintaining margins others are losing.

The Scenarios Construction CFOs Should Model Right Now

Here are the models your finance leaders should provide ASAP.

Best Case: Tariff De-escalation by Q4 2025

If trade negotiations stabilize and tariffs begin rolling back, you’ll see material costs normalize but not return to pre-tariff levels. Supply chains take 12-18 months to recalibrate, and suppliers who invested in tariff mitigation won’t immediately drop prices.

What to do: Maintain diversified sourcing relationships and don’t assume stability means you can revert to old procurement practices. The next trade dispute is always one tweet away.

Base Case: Tariff Status Quo Through 2026

Tariffs stay at current levels with periodic adjustments and exemptions. Material cost volatility continues, contractors build larger contingencies into estimates, and project margins compress across the industry.

What to do: Treat procurement as a strategic function requiring dedicated resources. The contractors who win work will be those who can credibly demonstrate they have material cost management strategies that buyers can rely on.

Worst Case: Escalating Trade Tensions and Expanded Tariffs

Additional countries implement retaliatory tariffs, the U.S. expands tariff categories, and construction material prices increase across the board with severe supply chain disruptions.

What to do: Prioritize working capital management, defer non-critical projects, and focus on securing margins on existing work rather than chasing volume. In severe scenarios, the construction companies that survive are those with fortress balance sheets.

Your Tariff Action Plan (Starting This Quarter)

Audit your material sourcing exposure. Where are your critical materials coming from? Which suppliers are vulnerable to tariff changes? What’s your plan B for each category?

Build supplier intelligence networks. Your suppliers know tariff changes are coming before you do. Formalize information-sharing relationships and make this part of regular procurement conversations.

Update contract templates and legal language. If your contracts don’t have specific, enforceable price escalation clauses tied to tariff impacts, you’re transferring risk to your balance sheet. Stop doing that.

Scenario model your major projects. Run sensitivity analyses on material costs under different tariff scenarios. Know exactly which projects are vulnerable and what your margin breakpoints are.

Need a Construction CFO Who Speaks Tariffs?

At Wiss, we work with construction companies navigating everything from job cost accounting to international supply chain risk. Whether you need help modeling tariff scenarios, strengthening procurement processes, or building financial contingencies into project estimates, we’ve been helping construction CFOs solve these problems since long before tariffs became front-page news.

Our construction services team helps contractors build financial strategies that work even when trade policy doesn’t.

Let’s talk about protecting your margins in an unpredictable trade environment. Contact our construction specialists to discuss how financial strategy can help you navigate tariff uncertainty—before it shows up as a margin problem in your year-end statements.

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