Tariffs, Trade, & Tomorrow
Charting the Future of Metal in Design & Construction
by Fiona Maguire-O’Shea, Staff Writer for METALCON
Navigating a turbulent economic landscape has become the order of the day for the metal design and construction industry. In a recent webinar hosted by METALCON Online, industry leaders came together to discuss the impacts of tariffs, supply chain disruptions, and shifting market dynamics on the sector. With METALCON 2025 approaching, now is the time to engage in these critical discussions.
Central to the conversation was Ken Simonson, Chief Economist at the Associated General Contractors of America, whose precise and candid insights about the current state of the economy and the specific effects of tariffs resonated strongly with the audience.
Simonson underscored the importance of understanding how governmental policies directly impact construction markets. The impact of tariffs is profound because they affect not only the cost of raw materials but also the strategic decisions that contractors and manufacturers make every day.
The metal design and construction industry, particularly in the non-residential segment where structural metal plays a key role, has experienced robust growth up until the end of 2024. “Real Gross Domestic Product has been growing now since we got out of the very brief recession caused by the pandemic in 2020,” Simonson said. He noted that despite a recent drop in confidence, ranging from business and consumer sentiment to specific instances like the architecture billings index, the underlying fundamentals of construction spending remain intact.
Simonson quickly moved onto tariffs and laid out the evolving and uncertain tariff landscape. He said, “We’re subject to 25% tariffs on aluminum and steel, and tariffs on goods from Canada and Mexico that are not covered by the United States–Mexico–Canada Agreement, the successor of NAFTA. It’s a very tricky, complex proposition to figure out exactly what is eligible. In addition, tariffs have been imposed on nearly every other trading partner at rates ranging from 10% to 104%. The rates are subject to change at any time, making planning and bid preparation extremely difficult.”
These policies, Simonson warned, could lead to dramatic shifts in pricing and supply chain logistics. The potential imposition of additional tariffs, ranging from as-yet unspecified tariffs on copper to possible fees on Chinese-built ships calling on United States ports, adds layers of uncertainty for an industry that depends heavily on imported materials as compared to other industries. Ian Waddell, Regional Manager at JFE Shoji America, said, “I think if they have the opportunity to use ships that aren’t made in China, that’s something they will try to take advantage of as well.”
Beyond the immediate impact of tariffs, Simonson also painted a broader economic picture. “I do think the economy has shown tremendous resilience in the last five years,” he observed. Simonson’s assessment draws a clear connection between short-term market jitters and the underlying long-term trends that continue to drive construction activity, particularly in areas such as data centers and utility scale battery storage. “Data center construction is up 39% from February of last year to February of this year,” he noted.
This intricate web of tariffs is also having a cascading effect on manufacturing spending and project planning. Simonson pointed out that, “census totals for total manufacturing construction have hit record levels,” yet remain highly susceptible to market shifts driven by tariff changes. He referenced high-profile projects, such as the semiconductor fabrication plants, that inject massive sums into a single month’s data. However, he also warned that many of these projects might slow down or even be canceled in the wake of tariff uncertainties, making it harder for companies to forecast long-term demand.
In a discussion of broader economic impacts, Simonson also touched upon the effects of declining confidence among consumers and contractors alike. He noted that “in the last six weeks, we’ve seen huge drop in all measures of confidence” despite construction spending remaining positive. This divergence between sentiment and spending is critical for understanding the future trajectory of the industry. While current spending figures may suggest a robust market, the underlying uncertainty, exacerbated by tariffs, potential regulatory changes, and geopolitical tensions, could lead to a more cautious approach in the coming months.
Another dimension of the discussion focused on the issue of immigration and its impact on the construction workforce. “Finally, I’d mention the drastic shutdown of immigration and the threat of mass deportation,” Simonson explained. With 34% of construction trades being foreign-born, and as high as 50 to 60% in certain specialties, any changes in immigration policy could severely disrupt labor availability, further complicating project timelines and cost estimates. This labor uncertainty is yet another factor that contractors must weigh against the backdrop of rising tariffs and material costs.
Despite the headwinds of rising tariffs, supply chain challenges and economic uncertainty, there remains a strong belief in the resilience and adaptability of the design and construction industry. While there are significant challenges, especially with the unpredictable nature of tariffs and associated trade policies, there are also sectors that are poised for continued growth.
“We have seen a small revival of single-family home building,” Simonson remarked, and even though multifamily construction has tapered off after record levels, new avenues are emerging, particularly in the realm of non-residential construction. His analysis suggests that while short-term adjustments may be required, the long-term fundamentals of the construction industry remain robust.
For contractors and manufacturers alike, one of the most pressing issues is how to manage cost uncertainty. Simonson pointed to the importance of tools and indices that track price movements. “I look every month at the producer price indexes by the Bureau of Labor Statistics,” he explained. “There is a steel mill products index and also one for copper, brass, and aluminum.” These tools help contractors gauge when input costs are rising so they can adjust their bids accordingly.
As the industry braces for potential further volatility, the messages conveyed emphasizes the need for adaptability, vigilance, and collaboration. For those in the metal design and construction industry, METALCON represents a unique opportunity to connect with peers, learn from leading experts and explore innovative strategies to manage tariff-related risks. As Simonson optimistically noted, “I remain a chronic optimist,” and that optimism is the cornerstone on which future growth and resilience will be built.
