--- title: What Business Owners Need to Know About How Tariffs Can Affect Commercial Construction Projects description: Learn how tariffs impact commercial construction projects. Discover key questions to ask your contractor to manage costs and mitigate delays effectively. image: https://www.liveoak.bank/hubfs/what-business-owners-need-to-know-about-how-tariffs-can-affect-commercial-construction-projects-live-oak-blog-post.jpg --- ![FDIC-Insured - Backed by the full faith and credit of the U.S. Government](https://www.liveoak.bank/hubfs/LiveOakBanking_July2020/fdic-digital-sign-whitetxt.svg) [![Live Oak Bank](https://www.liveoak.bank/hubfs/raw_assets/public/LiveOakBanking_July2020/images/live-oak-logo-full-color.svg "Live Oak Bank")](https://www.liveoakbank.com/) Log In - Business - [Loans](https://www.liveoak.bank/business-loans/) - [SBA](https://www.liveoak.bank/business-loans/sba-loans/) - [USDA](https://www.liveoak.bank/business-loans/usda-loans/) - [Live Oak® Express](https://www.liveoak.bank/business-loans/live-oak-express/) - [Banking](https://www.liveoak.bank/business-banking/) - [Checking](https://www.liveoak.bank/business-checking/) - [Savings](https://www.liveoak.bank/business-savings/) - [CDs](https://www.liveoak.bank/business-cd-accounts/) - Personal - [Banking](https://www.liveoak.bank/personal-banking/) - [Savings](https://www.liveoak.bank/personal-savings/) - [CDs](https://www.liveoak.bank/personal-cd-accounts/) - [Commercial](https://www.liveoak.bank/commercial/) [![Live Oak Bank](https://www.liveoak.bank/hubfs/raw_assets/public/LiveOakBanking_July2020/images/live-oak-logo-full-color.svg "Live Oak Bank")](https://www.liveoakbank.com/) - Business - [Loans](https://www.liveoak.bank/business-loans/) - [SBA](https://www.liveoak.bank/business-loans/sba-loans/) - [USDA](https://www.liveoak.bank/business-loans/usda-loans/) - [Live Oak® Express](https://www.liveoak.bank/business-loans/live-oak-express/) - [Banking](https://www.liveoak.bank/business-banking/) - [Checking](https://www.liveoak.bank/business-checking/) - [Savings](https://www.liveoak.bank/business-savings/) - [CDs](https://www.liveoak.bank/business-cd-accounts/) - Personal - [Banking](https://www.liveoak.bank/personal-banking/) - [Savings](https://www.liveoak.bank/personal-savings/) - [CDs](https://www.liveoak.bank/personal-cd-accounts/) - [Commercial](https://www.liveoak.bank/commercial/) - [Log In](https://www.liveoak.bank/?modal=signIn) - [Get Started](https://www.liveoak.bank/get-started/) Sign In × Personal Banking & Small Business - Tidal Business Checking - Business Savings & CDs - Personal Savings & CDs [Sign In](https://secure.liveoak.bank/login) [Open a New Account](https://www.liveoak.bank/get-started/) Commercial Banking - Business Plus Checking - Business Plus Savings & CDs - Treasury Management [Sign In](https://online.liveoak.bank/DigitalBanking/login?iid=LOBNC) [Contact Us](https://info.liveoakbank.com/business-plus-form) Business Loans - Manage Payments - Get Statements - Continue an Application [Sign In](https://loan-servicing.liveoak.bank/login) [Contact a Loan Specialist](https://www.liveoak.bank/get-started/form-contact-loan-specialist/) # You are about to leave the Live Oak Bank website. **Disclaimer:** This link will take you to a website outside of the Live Oak Bank site. The new site may offer a different privacy policy and level of security. Live Oak Bank is not responsible for the products or services that are offered or expressed on other websites. Yes, I understand. Please Continue [Resource Center](https://www.liveoak.bank/blog) / [Finance My Business](https://www.liveoak.bank/blog/tag/finance-my-business) # What Business Owners Need to Know About How Tariffs Can Affect Commercial Construction Projects Written by Live Oak Bank ![how tariffs can affect commercial construction projects](https://www.liveoak.bank/hubfs/what-business-owners-need-to-know-about-how-tariffs-can-affect-commercial-construction-projects-live-oak-blog-post.jpg) With Live Oak, you get a partner who believes in your success, and is willing to take the journey alongside you. We provide small business loans tailored to your goals. [Learn More](https://www.liveoakbank.com/business-loans/?RefId=blog) ### What is a tariff? A tariff is a tax or duty imposed by a government on imported or exported goods and services. The purpose of tariffs is often to protect domestic industries from foreign competition, raise government revenue, or influence trade relations between countries. Tariffs can increase the price of imported goods, making them more expensive for consumers and businesses that rely on these goods for production or resale.   ### How are tariffs affecting construction projects? While tariffs are not new, recent changes in tariffs have begun impacting certain areas\* within the construction industry, leading to rising material costs and potential delays. The impacts of current tariffs and future changes in tariffs are uncertain. It is important for business owners to stay informed and proactive in managing costs.   ### Stay in contact with your general contractor We recommend discussing these points with your contractor to ensure there are clear expectations and to avoid any unexpected financial surprises during the project.   ### Questions to ask your contractor To help ensure transparency and better planning for your upcoming projects, here are a few questions business owners should ask their contractors regarding current pricing: - Are there specific materials that have seen significant price increases due to tariffs? - How have recent tariff changes impacted the cost of materials for my project? - Have you adjusted your overall project cost estimate to account for these changes? - What steps are being taken to minimize the impact of these price hikes on my project’s budget? - Are there alternative materials or suppliers that could mitigate the cost increases? - How might these tariffs affect the project timeline, especially if material shortages or delays occur? - What is your strategy for addressing potential future tariff adjustments during the course of the project? It’s important to review your construction contract to understand the implications of certain clauses, effects on suppliers and potential delays. Read the tips below to help you better understand your contract.   ### Understand your construction contract's force majeure clause At the highest level, the force majeure clause is designed to relieve a party from fulfilling its obligations under the contract due to circumstances beyond its reasonable control. Typically, these events include natural disasters, war, strikes, or government intervention. However, the imposition of tariffs by governments can also trigger this clause if the tariffs result in an event that prevents or significantly delays the performance of contractual obligations. Depending on the terms of the clause, the party affected by the tariffs may be able to invoke force majeure to excuse their non-performance or delay in performance. Read your contract to understand your force majeure clause, specifically, are tariffs explicitly covered as a force majeure event? If no, is it possible they fall under broader language such as “government action” or “trade restrictions?” It is important to understand that the clause may still be invoked even in absence of specific tariff language.   ### Recognize other clauses if there is no force majeure clause Some construction contracts do not have a specified force majeure clause. In those instances, there can be excusable delay clauses that allow for tariff-related delays. The AIA form has several categories that tariffs could fall into, including: “unusual delay in deliveries,” “unavoidable casualties” and “other causes beyond the contractor’s control.”   ### Reach out to your Live Oak Bank Construction Specialist Your construction specialist can talk through any concerns you may have regarding your project costs and the construction timeline. We can also schedule a call with you and your general contractor or suppliers to better understand the possible impacts of tariffs on your construction project. *\*As of March 15, 2025, we have noticed impacts on the following materials: steel, aluminum,* *lumber, and some electrical materials.* **Tags:** [Finance My Business](https://www.liveoak.bank/blog/tag/finance-my-business), [Business Banking](https://www.liveoak.bank/blog/tag/business-banking) ### Related Resources ### [![Five Things You Need to Know About Collateral for a Business Loan](https://www.liveoak.bank/hubfs/Blog%20Featured%20Images/collateral-for-business-loan-live-oak-blog-post-800x400.jpg) Finance My Business Five Things You Need to Know About Collateral for a Business Loan 3 minute read](https://www.liveoak.bank/blog/five-things-you-need-to-know-about-collateral-for-a-business-loan) ### [![small business tax season stress relief](https://www.liveoak.bank/hubfs/tax-season-stress-relief-live-oak-blog-post.jpg) Small Business How a Business Savings Account Can Relieve Tax Season Stress for Entrepreneurs 2 minute read](https://www.liveoak.bank/blog/how-a-business-savings-account-can-relieve-tax-season-stress-for-entrepreneurs) ### [![how-to-choose-a-general-contractor](https://www.liveoak.bank/hubfs/25-LOB-BlogPosts-how-to-choose-a-general-contractor-100925.jpg) Small Business How to Choose a General Contractor for Your Construction Loan 15 minute read](https://www.liveoak.bank/blog/how-to-choose-a-general-contractor) ### Subscribe via Email We're committed to your privacy. 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