The bill for tariffs is showing up in bid prices. Nonresidential construction input costs jumped at a 12.6% annualized rate in the first two months of 2026, the fastest run since the supply-chain chaos of early 2022, according to Associated Builders and Contractors analysis of federal data.
Where the pressure sits
Steel, aluminum, and copper made mostly from those metals carry a 50% tariff as of spring; derivative products sit at 25%. Softwood lumber runs 10%, with derivatives at 25%. Structural steel prices alone were up 11.9% in the latest index reading. A separate global 10% tariff is scheduled to expire July 24, and whether it lapses or gets extended will swing budgets on projects bidding this summer.
What builders are doing about it
AGC is urging contractors to revisit contract language, price-escalation clauses, and material-cost pass-throughs before signing. Baseline escalation is running 4% to 6%, higher in tariff-exposed trades. For material-heavy work like the cement and industrial sector, the volatility is hard to hedge, and fixed-price bids locked months ago are the ones that hurt. Contractors that aren’t repricing regularly are quietly eating margin. The ones writing escalation into every new deal are the ones still protecting it.