Liberation Day’ tariffs will slow construction rebound

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• US President Trump’s ‘Liberation Day’ tariffs point to a weaker construction outlook than what we published in our Q1 update.

• The US will impose a minimum 10% tariff on all trading partners from April 5. Several economies will face larger tariffs from April 9 – some as high as 49%. Some products including steel and aluminium will remain subject to their own fixed tariffs.

• We are likely to downgrade to our 2025 and 2026 forecasts for privately funded construction activity, with the biggest impact on industrial buildings. The tariffs have increased uncertainty as firms do not know which of the tariffs will remain beyond the 2028 US presidential election, or whether additional tariffs will be imposed. This amplifies risks around investment decisions, thereby reducing financing of construction work. Private sector financing of projects could remain below our recent baseline forecast through to the mid-2030s.

Chart 1: ‘Liberation Day’ tariffs increase the effective US tariff rate to a level not since seen the 1930s