As President-elect Donald Trump prepares to take office, his promise to impose widespread tariffs could lead to significant price hikes for commercial builders, particularly in materials sourced from China. While the details remain uncertain, industry leaders are already concerned about the potential impacts.

Chris Fisher, managing principal at consulting group Ducker Carlisle, explained that "what will create challenges for commercial construction is if we see a significant amount of tariffs that are announced, followed through and then actually enforced." He added that broad enforcement could raise the cost of materials, causing project delays or deferrals.

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Metals, coatings, and mechanical, electrical, and plumbing (MEP) components imported from China could see major price increases. Fisher specifically mentioned that products like lower-cost plumbing components, HVAC parts, and structural steel, including red iron steel, are at risk. China is the world’s largest crude steel producer, and higher tariffs could undo recent cost reductions. "My guess is the Trump administration is going to put even higher tariffs on Chinese steel," said Anirban Basu, chief economist at Associated Builders and Contractors. "If you're a consumer of steel, that drives up steel price higher than it otherwise would be."

Electrical components, such as gear parts, may also face rising prices, with potential tariffs exacerbating supply chain bottlenecks, particularly in sectors like data center and manufacturing construction. Fisher noted that federal projects, which generally require domestic materials, would likely face minimal impact from tariffs.

However, tariffs could have a ripple effect on domestically produced items as well. Ken Simonson, chief economist at the Associated General Contractors of America, warned that "new or increased tariffs have the potential to raise prices for a wide range of construction inputs, including items produced domestically that compete with imports." This follows the pattern seen during the COVID-19 pandemic, when supply chain disruptions and inflation led to price hikes that some suppliers have kept in place.

Despite these concerns, some industry experts question whether the tariffs will actually be implemented as proposed. Basu speculated that "a lot of these announced tariffs are simply posturing by the president" and predicted a modest increase in targeted tariffs. Fisher emphasized that the full impact of the tariffs is still uncertain, noting, "We’re a long way from that. We don’t know what level of actual tariffs will be implemented and then how and what will be enforced."