Recent aluminum industry news reveals that steel and aluminum tariffs now affect $320 billion worth of products, up from $190 billion before the expansion. These expanded tariffs represent a critical concern for construction industry executives, as steel and aluminum together account for 15-30% of a typical U.S. building’s direct material budget.
The impact is already evident, with the producer price index for cold-rolled steel sheets and strips jumping 9.4% monthly, while hot roll coil prices have surged from $680 to $950 per ton—almost a 40% increase. Consequently, the 50% steel tariff significantly increases procurement costs, creating ripple effects on budgeting, scheduling, and project feasibility across sectors. For construction professionals managing material procurement, these price volatilities pose substantial challenges to project timelines and financial planning.
The disruption to steel and aluminum imports, particularly from long-standing trade partners such as Canada and Mexico, is straining availability and further driving up prices across the commercial sector. However, domestic processors like American Douglas Metals are helping mitigate these pressures through custom sizing, just-in-time inventory solutions, and local processing capabilities. This article examines how these tariffs are reshaping the construction materials landscape and offers practical strategies for procurement leaders navigating these unprecedented market conditions.
Tariff Policy Overview and Timeline of Implementation
The ongoing aluminum tariff saga began on February 10, 2025, when President Trump reinstated Section 232 tariffs, imposing a 25% duty on steel and aluminum imports. This policy invoked authority under Section 232 of the Trade Expansion Act of 1962, which permits import adjustments when national security is threatened.
Section 232 Reinstatement and 2025 Tariff Hike
Initially, the reinstated tariffs eliminated all alternative agreements that had previously created loopholes exploited by countries with excess production capacity. On June 3, 2025, the administration dramatically escalated these measures by increasing the aluminum tariff rate from 25% to 50% effective June 4. This increase aimed to counter “foreign countries that continue to offload low-priced, excess steel and aluminum in the United States market”. Notably, only the United Kingdom maintained the original 25% rate, pending the outcome of the US-UK Economic Prosperity Deal negotiations.
Aluminum Tariff Scope: From Raw Billets to Fabricated Products
The tariff scope expanded substantially in August 2025 when the Bureau of Industry and Security added 407 new HTSUS subheadings to the list of covered products. These additions specifically targeted derivative products, addressing industry concerns about tariff circumvention through finished goods. According to the Aluminum Association, this expansion represents “a major win for U.S. aluminum makers” by preventing countries from “circumventing trade rules by importing unfairly produced and traded aluminum in end products”.
Exemptions and Country-Specific Adjustments
Prior to March 12, 2025, several major trading partners including Argentina, Australia, Brazil, Canada, the EU, Japan, Mexico, South Korea, Ukraine, and the UK had received tariff exemptions. These exemptions were terminated when the reinstated tariffs took effect. For construction firms, this elimination of exemptions proved particularly disruptive since Canadian imports of primary aluminum had risen approximately 18% above 2015-2017 baseline levels, making Canada a critical source for many U.S. builders.
The industry continues adapting to these changes, with companies like Kawneer—a manufacturer of architectural aluminum products for nonresidential buildings—rerouting cross-border contracts and adjusting production footprints across North America to avoid tariff exposure.
Direct Cost Impact on U.S. Construction Projects
Aluminum prices reached historic highs during 2025, creating unprecedented budgeting challenges for construction firms across the nation. The direct financial impact extends far beyond simple material acquisition costs, reshaping project economics at multiple levels.
Aluminum Pricing Trends in Q4 2025
U.S. Midwest Premium aluminum prices soared to 60 cents per pound (USD 1,323 per metric ton) by mid-2025, marking a staggering 190% increase from November 2024 levels. Financial forecasts for Q4 2025 reveal continuing volatility:
- Goldman Sachs projects USD 2,300 per ton by December, driven primarily by tariffs and alumina costs
- Euroguss estimates prices at USD 2,300 ± USD 300 per ton due to inventory declines
- JP Morgan predicts slightly lower figures at USD 2,200 per ton amid recession concerns
These fluctuations reflect deep market uncertainty, creating substantial budgeting challenges for construction planners.
Impact on Commercial and Infrastructure Bids
The effects on project financials have been immediate. Materials costs have increased by approximately 9% in 2025, leading to a 4.6% rise in total project costs compared to Q4 2024. Moreover, in a case study of a USD 375 million healthcare development, the aluminum tariffs added roughly USD 22 million to overall costs. Data centers face even steeper challenges, as some facilities require up to 50,000 tons of copper per site.
Custom Aluminum Blanks and Fabrication Cost Volatility
Custom aluminum extrusions now range from USD 1,500 to USD 3,500 per metric ton. Surface finishes add approximately USD 1,200 to USD 1,400 per metric ton. For construction firms requiring custom designs, the price volatility presents additional challenges as manufacturers pass these costs to customers. Domestic processors like American Douglas Metals help mitigate these pressures through custom sizing and local processing capabilities.
Why Aluminum Price is Increasing: Global and Domestic Drivers
Several factors underpin the ongoing price surge. Electricity represents 30% of aluminum production costs in the U.S. and 45% in China. Additionally, the doubling of tariffs to 50% on July 4, 2025 severely restricted import flows. Furthermore, China’s production remains capped at 45.5 million tons, while the global aluminum market is shifting from surplus to an estimated 400,000-600,000 ton deficit.
Supply Chain Disruptions and Material Availability Risks
Beyond price volatility, construction executives face the equally challenging issue of material availability. Tariff policies have fundamentally altered aluminum supply chains, creating ripple effects throughout procurement networks.
Construction Aluminum Supply Shortage: Lead Time Analysis
Current lead times for specialty aluminum products have reached unprecedented levels in late 2025, with drawn seamless aluminum tubing taking 50-60 weeks, structural extrusions in 7xx & 2xx alloys requiring 25-30 weeks, and drawn porthole tubing needing 12-14 weeks. For contextual perspective, experts estimate that lead times for general construction materials have expanded 25-40% above pre-pandemic baselines. Suppliers of common construction alloys (6063, 6061, and 6005) report that raw material scarcity continues to extend delivery timelines.
Import Delays and Port Congestion Effects
Logistics networks face mounting pressure as CBP implemented a 200% tariff on aluminum with unknown country of origin effective June 28, 2025. This policy shift triggered shipping disruptions worldwide. Port congestion remains severe at European hubs including Antwerp, Rotterdam, and Hamburg. Shipping costs reflect these challenges—rates from China to US East Coast jumped 9% to $322 per container, while West Coast routes increased 16% to $383.
Vendor Allocation Systems and Summer 2025 Constraints
Faced with material shortages, suppliers have implemented allocation systems that prioritize established customers. As demand for specialized components increases—especially from energy sector projects—manufacturers struggle to maintain inventory levels. In response, contractors now routinely add contingency buffers to bids and seek alternative domestic suppliers like American Douglas Metals. Despite these adaptations, project timeline extensions remain unavoidable for most commercial construction ventures.
Procurement and Contractual Strategies for Mitigation
Construction firms navigating aluminum tariffs must adopt strategic procurement approaches to mitigate cost volatility. Several contractual and sourcing tactics have proven effective throughout 2025.
Escalation Clauses and Material Allowance Provisions
Forward-thinking procurement leaders now routinely implement price escalation clauses in contracts. These provisions establish baseline prices for specific materials and allow for equitable adjustments when costs fluctuate. Effective clauses typically trigger when material costs increase by 10% or more from contract execution. For federal projects, FAR 16.203-4 permits Economic Price Adjustments when unit prices change by at least 3%, though aggregate increases may be capped at 10%. Additionally, material suppliers have revamped contracting language with carveouts for tariff adjustments, becoming standard industry practice.
Vendor-Managed Inventory (VMI) for Just-in-Time Fulfillment
In the vendor-managed inventory model, suppliers manage inventory at the business’s premises, optimizing shipments based on real-time demand data. This approach reduces both shortages and surpluses while streamlining supply chains. Construction firms utilizing VMI benefit from automated replenishment systems that ensure just-in-time restocking—particularly valuable amid current lead time uncertainties.
Sourcing from American-Made Aluminum Suppliers
Utilizing domestic aluminum sources offers substantial advantages in today’s market. American manufacturers comply with the Build America, Buy America Act (BABAA), making their products eligible for government projects. Furthermore, domestic sourcing eliminates customs delays that can dramatically slow deliveries.
Role of American Douglas Metals in Domestic Processing
American Douglas Metals (ADM) provides specialized aluminum extrusions and custom fabrication services that help mitigate supply chain disruptions. Their dedicated team works closely with customers to develop tailored solutions from concept to completion. Secure Your Aluminum Supply Chain—Contact ADM (https://americandouglasmetals.com/) for Custom Solutions Today.
Conclusion
The expansion of aluminum tariffs to over $320 billion in covered goods has reshaped construction procurement in 2025. With Midwest Premium aluminum prices up nearly 190% year-over-year and average material costs increasing by 9%, construction firms are facing not only financial pressure but significant project risk.
Lead times have extended well beyond pre-pandemic levels, with specialty products now requiring 25 to 60 weeks for delivery. Combined with global port congestion and the elimination of exemptions for key trade partners like Canada, traditional supply chains have been fundamentally disrupted.
In response, forward-looking firms are shifting away from low-cost sourcing models in favor of stability, compliance, and speed. Strategies such as price escalation clauses, vendor-managed inventory systems, and domestic sourcing have become essential tools for safeguarding margins and timelines.
American Douglas Metals (ADM) supports this shift with U.S.-based aluminum processing, just-in-time inventory solutions, and custom fabrication services tailored to construction-specific demands. As a trusted partner to manufacturers, contractors, and procurement leaders, ADM enables greater control in an increasingly unpredictable market.
Secure your aluminum supply chain—contact ADM to explore tailored solutions that keep your operations resilient and your projects moving forward.
FAQs
Q1. How have the new aluminum tariffs affected construction costs in the US?
The new aluminum tariffs have significantly increased construction costs in the US. Materials costs have risen by approximately 9%, leading to a 4.6% increase in total project costs compared to the previous year. For example, a $375 million healthcare development saw an additional $22 million in costs due to the aluminum tariffs.
Q2. What are the current lead times for aluminum products in the construction industry?
Lead times for aluminum products have extended dramatically. Specialty aluminum products like drawn seamless aluminum tubing can take 50-60 weeks, structural extrusions in certain alloys require 25-30 weeks, and drawn porthole tubing needs 12-14 weeks. Overall, lead times for construction materials have expanded 25-40% above pre-pandemic baselines.
Q3. How are construction firms mitigating the impact of aluminum tariffs?
Construction firms are adopting several strategies to mitigate tariff impacts. These include implementing price escalation clauses in contracts, utilizing vendor-managed inventory systems for just-in-time fulfillment, sourcing from domestic aluminum suppliers, and working with specialized processors like American Douglas Metals for custom solutions and fabrication services.
Q4. What is causing the increase in aluminum prices?
Several factors are driving the increase in aluminum prices. These include the doubling of tariffs to 50%, electricity costs (which represent 30-45% of production costs), restrictions on global production (particularly in China), and a shift in the global aluminum market from surplus to deficit. The elimination of exemptions for major trading partners has also contributed to price volatility.
Q5. How have supply chains been affected by the new aluminum tariffs?
The aluminum tariffs have significantly disrupted supply chains. Import delays and port congestion have increased, particularly at European hubs. Shipping costs have risen, with rates from China to the US East Coast jumping 9% and West Coast routes increasing 16%. Suppliers have implemented allocation systems that prioritize established customers, making it challenging for new projects to secure materials.