Construction Leaders Brace for Trump’s Trade, Tax, and Labor Shifts
With Donald Trump’s re-election, industry leaders are speculating on the changes his administration could bring to the US construction industry. From trade and tax policies to deregulation and immigration, each area holds significant potential to impact construction companies, labor markets, and project costs. Trade tariffs and immigration policies, in particular, are expected to be high on the new administration’s agenda, with effects that could reach every part of the construction supply chain.
In anticipation of shifts, associations like the Associated Builders and Contractors (ABC) and the National Utility Contractors Association (NUCA) have voiced hopes and concerns, particularly regarding workforce availability and regulation.
Trade policies and tariffs on Chinese imports
One of the most pressing questions surrounding Trump’s return to office is his approach to trade, particularly with China. The ‘America First’ policy championed in his previous administration established steep tariffs on imported goods, including construction-critical materials such as steel, aluminum, and solar components. These tariffs were intended to shield domestic manufacturers from foreign competition, but they also increased material costs for industries dependent on these imports. If reintroduced, Trump’s tariffs could pose substantial cost challenges to US construction firms.
With Trump proposing tariffs as high as 60% on certain Chinese goods, construction companies may face further increases in material prices, potentially forcing firms to re-evaluate budgets or explore alternative suppliers. For instance, a jump in steel or aluminum costs could raise overall project expenses, particularly for infrastructure projects requiring large quantities of such materials.
In addition to tariffs, Trump’s policy may involve intensified ‘decoupling’ from China, especially in technology-related supply chains. This could further complicate access to essential components, impacting project timelines and costs. For construction firms, navigating this environment will require close monitoring of trade developments and careful supply chain planning.
Tax cuts and their role in supporting construction profitability
Trump’s initial presidency saw the passage of the Tax Cuts and Jobs Act (TCJA), which introduced a 21% corporate flat tax rate and shifted the US tax system to a territorial model. This change allowed US companies with foreign subsidiaries to pay taxes based on the host country’s rates rather than US rates, reducing tax burdens for firms with international operations.
With individual provisions set to expire in 2025, Trump’s administration may push to extend or expand tax benefits, a move that could further bolster construction industry profitability. Trade groups like ABC have advocated for tax ‘certainty and fairness’ to support small construction businesses, and industry leaders are optimistic about the continuation or enhancement of these policies.
Future tax legislation may also offer incentives or credits specifically targeted to infrastructure or renewable energy projects. These changes could present new financial advantages, encouraging firms to pursue large-scale or innovative projects that might otherwise have been economically unfeasible.
Deregulation strategies
With deregulation expected to be a focal point in Trump’s second term, construction industry leaders anticipate potential shifts in policies that could streamline project approvals and reduce compliance costs. Trump’s earlier administration introduced Executive Order 13771, which mandated the removal of two existing regulations for each new one implemented. Although rescinded by the Biden administration, Trump’s approach may reintroduce similar regulatory rollback efforts, potentially benefiting construction firms by lowering administrative and compliance costs associated with new projects.
Deregulation could simplify areas like environmental permitting and safety compliance, cutting red tape and accelerating timelines for large infrastructure projects. For example, less-stringent requirements on environmental assessments might speed up construction starts, helping firms reduce holding costs. However, some industry professionals are cautious, noting that deregulation can bring added risks, particularly in construction—a sector where safety, quality, and environmental standards are critical.
Addressing the skilled labor shortage
The US construction industry has long faced a shortage of skilled labor, a challenge that may intensify under Trump’s immigration policies. The construction workforce relies significantly on immigrant labor, with many roles filled by foreign-born workers. Trump’s proposed immigration restrictions, which may include increased deportations, pose a risk to the construction labor supply and could hinder firms’ ability to meet workforce demands.
Stringent immigration policies could drive labor shortages, leading to higher project costs, wage inflation, and potential project delays. For example, Trump’s proposed use of the 1798 Alien Enemies Act to deport individuals affiliated with certain criminal activities could impact entire communities, further straining the labor market in industries like construction that rely heavily on immigrant labor. This could create a ripple effect, making it challenging for firms to maintain a steady workforce and potentially inflating wages as demand for skilled labor exceeds supply.
To counteract these challenges, many construction firms are increasing efforts to attract younger, local talent by investing in apprenticeship programs, partnering with technical schools, and offering competitive salaries and benefits.
Industry perspectives and response – divided views on Trump’s policies
Trump’s policies have spurred divided reactions among industry associations, business leaders, and unions across the construction sector. The Associated Builders and Contractors (ABC), a trade group representing primarily non-union contractors, has expressed support for Trump’s regulatory and tax initiatives. ABC leaders argue that these policies—such as tax certainty, trade protections, and potential deregulation—align with their members’ interests, as many are small to mid-sized businesses that stand to benefit from reduced compliance burdens and lower taxes. ABC President Michael Bellaman’s optimism reflects the association’s broader view that construction firms will have greater opportunities to operate freely, reduce costs, and expand their workforce under Trump’s administration.
On the other hand, some of the largest unions in the US construction industry, including the United Brotherhood of Carpenters and Joiners of America and the International Brotherhood of Electrical Workers, backed the policies of the Biden administration, which bolstered labor protections and promoted federal construction projects through initiatives like the Infrastructure Investment and Jobs Act. Union leaders are concerned that Trump’s return to office may jeopardize labor rights and the wages and benefits that union workers rely on. For instance, deregulation efforts could dilute labor protections, making it more challenging to uphold fair standards in wage and safety practices. Additionally, immigration policies affecting labor availability could further stress unionized projects, impacting timelines and labor costs.
As Trump begins his second term, the US construction industry is preparing for potential shifts across key areas including trade, taxation, deregulation, and immigration. Trade tariffs on Chinese goods are likely to affect material costs, while continued tax benefits may sustain firm profitability. Meanwhile, anticipated deregulation could streamline projects but may require companies to uphold rigorous internal compliance to mitigate risks. Immigration policy will also remain a critical area of concern, as labor shortages continue to challenge project timelines and workforce availability.
In this dynamic environment, industry leaders and associations are voicing optimism and concerns alike, with some eager to embrace deregulation and tax stability, and others cautious about the implications for labor rights and wage standards.
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