There has been a lot of discussion lately about President Trump’s plan to assess tariffs of 25% on steel and 10% on aluminum. Construction materials use a lot of steel and would be greatly impacted by cost increases that will likely flow from such tariffs.
Regardless of where construction contractors and subcontractors stand on this controversial topic, they need to appreciate the impact this move may have on their bottom line, as most construction contracts do not allow for price escalation under these circumstances (As the factual predicate for the tariffs is a “security threat,” if your contract provides relief for security events, contractors may be able to make a creative argument for a change order on those grounds). So, contractors and subcontractors need to consider, on a “going forward” basis, limiting the duration of their bids and/or including contract provisions that would allow price escalation due to steel or aluminum price increases.
