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How Architects Can Address the Impact of Tariffs on Current and Future Construction Projects
As featured in Archinect:
As the new Administration passes 60 days in office, tariffs continue to form a cornerstone of the Administration’s trade policy. On March 12th, the U.S. imposed steel and aluminum tariffs on Canada with more potentially coming on April 2nd. Meanwhile, a trade probe on U.S. lumber imports being carried out by the U.S. Commerce Secretary may yet see tariffs imposed on lumber products from countries including Canada.
Archinect has reported extensively on the impact of such tariffs, whether implemented or threatened, on the U.S. architecture and construction sector. Construction input prices have risen, with the ABC noting in February that tariff threats caused a “rapid escalation” in material prices. The ABC has also previously warned that a trade war with Canada and Mexico could impact construction spending, while the AIA said last week that a continuing decline in their Architecture Billings Index is being partly fuelled by tariff uncertainty.
The developments present two urgent situations for architects to address. The first, perhaps more complex, is navigating rising material prices and potential shortages for construction projects that are already in progress, particularly where budgets and timelines have already been established at pre-tariff prices. Secondly, architects must also contend with the impact of tariffs on future projects not yet at the construction stage.
To explore both questions, Archinect spoke with Phillip Ross, a partner at accounting firm Anchin, and leader of the company’s architecture, engineering, and construction divisions. Ross has previously shared his views with Archinect on interest rate cuts in late 2024, as well as predicting the economic outlook of the profession through 2025.
On current construction projects
“Managing rising material costs in active construction projects requires proactive procurement and supplier diversification,” Ross told Archinect in response to our first question on how architects can mitigate the impact of tariffs for projects already under construction. “Expanding sourcing options reduces dependence on any single supplier, mitigating risks from supply chain disruptions.”
In addition to diversifying, Ross recommends securing materials as early as possible to lock in current prices and avoid cost spikes. Firms should also negotiate fixed pricing or volume-based discounts where possible, Ross adds, in addition to reviewing construction contracts for escalation clauses and supply chain risks to determine who bears such risks and whether any additional costs can be recovered.
“Strong cash flow is essential for absorbing cost increases and leveraging strategic purchases,” Ross added as a final point. “Assessing financing options and tax savings strategies ensures firms are financially positioned to navigate market volatility.”
On future construction projects
To mitigate against the risks of an unpredictable trade landscape on future projects, Archinect asked Ross for his advice or strategy recommendations to be taken before the construction process begins.
“Early planning is key to mitigating price volatility,” Ross noted. “Building strong supplier relationships and negotiating fixed pricing can provide cost certainty.”
“Procurement strategies should prioritize early material purchases and supplier diversification to reduce exposure to shortages,” Ross continued. “Look to include clauses in contracts to allow flexibility in sourcing, protection against excessive price hikes, and schedule adjustments for potential delays.”
Ross was also keen to stress the importance of financial resilience, noting that smart cash flow management can create a buffer against unexpected costs. In addition, Ross advises that teams look for opportunities for financial efficiencies, such as more timely billing, which should lead to cash collections improving and help leverage strategic purchasing.
“Ultimately, adaptability is critical,” Ross concluded. “A mix of contingency plans, alternative sourcing, and financial safeguards will position firms to weather an unpredictable trade landscape.”