Cliff Grassmick, Boulder Daily Camera
A Ripple Effect Across the Rockies
When the Trump Administration reinstated broad steel and aluminum tariffs, the stated goal was to revive U.S. manufacturing. But for Colorado’s construction sector—an industry that contributes $33 billion annually to state GDP and employs over 191,000 workers—the results have been far more complicated.
According to the Governor of Colorado’s 2025 Tariff Report, these new and expanded tariffs are inflating costs, delaying projects, and tightening already-thin contractor margins across the Rockies.
The Tariff Landscape:
Trump’s revived Section 232 tariffs place 25–50% duties on imported steel, aluminum, and derivative products.
The result: a massive spike in the price of the very materials that hold up Colorado’s homes, schools, and commercial buildings.
Colorado imports $745 million in metal products and $318 million in wood products each year—much of it from Canada and Mexico.
Nearly 25% of U.S. steel and 50% of aluminum come from abroad, making the state’s builders directly exposed to global trade shifts.
The report shows construction input material costs are now 20–40% higher than 2020, pushing total project expenses up 15–25%.
In one cited example, a mid-sized commercial contractor in Denver reported a $750,000 cost overrun due solely to steel price fluctuations, an expense that cascaded through subcontractors and suppliers alike.
Housing and Infrastructure: A Perfect Storm
Colorado’s housing affordability crisis is deepening as construction inputs climb. Residential materials account for 35–50% of total home costs, and roughly 7% of those inputs are imported. The Colorado Housing and Finance Authority found that the average cost to develop a multifamily unit rose over 50% in four years, largely because of tariffs and inflation.
Supply Chain Disruptions
The tariffs also strained supply chains. Many Colorado builders relied on imported structural steel, specialty aluminum components, and finished electrical fixtures. With import costs up and supply constrained, lead times doubled or even tripled for key materials. Some developers delayed projects indefinitely; others shifted to modular or prefabricated construction methods to mitigate unpredictability.
Small Businesses Caught in the Middle
The report highlights how smaller firms lacked the purchasing power or financial buffers to weather the volatility. Construction SMEs, particularly in rural Colorado, faced tighter margins and cash flow issues. Some turned to alternative suppliers in Canada and Mexico, only to encounter new tariffs and customs delays under shifting trade policies.
Looking Ahead: Lessons for Policy and Planning
The Governor’s report calls for greater supply chain resilience and smarter procurement policies, suggesting that state and local governments should diversify sourcing and consider material cost indices in public project bids. It also emphasizes the importance of maintaining open trade channels for sectors like construction, where local economies are deeply intertwined with global markets.
Conclusion
For Colorado’s construction companies, the Trump-era tariffs were a stark reminder that trade policies don’t exist in a vacuum. The intent to strengthen American manufacturing clashed with the realities of interconnected supply chains, leaving builders across the state juggling cost inflation, project uncertainty, and workforce challenges — issues that still shape the industry today.
