Tariff Pause or Budget Mirage - Bay to Bay Properties

Industry Insights

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June 10, 2025

Tariff Pause or Budget Mirage?

What Developers Need To Know About the 90-Day Window-And How To Stay Ahead

By Joe Faw

Tariffs and Cost Volatility in Construction

Trade tariffs have long been a source of uncertainty in construction, and 2025 is noexception. Steel prices surged 15–25%, and aluminum jumped 8–10% early this year dueto renewed U.S. duties and retaliatory tariffs from China.

These pressures affect concrete, lumber, drywall, and metals, adding billions in costs across the industry. Success today requires builders who can adapt contracts, teams, and processes quickly and strategically.

Recent U.S.–China Tariff Truce

In May 2025, the U.S. and China agreed to a 90-day cooling-off period in their tariff dispute. The U.S. rolled back certain duties—from 145% to 30%—while China lowered tariffs on American exports and eased restrictions on key raw materials.

While this may stabilize prices temporarily, uncertainty remains. Even reduced tariffs are far above pre-conflict norms, and developers should expect ongoing volatility through the end of the year.

Contractual Protections: Escalation Clauses and Risk Sharing

At Bay to Bay, we discuss escalation clauses and change-in-law provisions with every client. These safeguards ensure that if tariffs, regulations, or supply shocks push costs upward, contracts can be adjusted fairly—protecting both the project and the GC.

Our goal is simple: deliver projects on time without absorbing risk created by global politics. We manage that uncertainty through transparency, process, and planning.

Managing Subcontractor Risk

Effective subcontractor management is central to our approach. Every subcontract mirrors the risk protections in the prime agreement. This “flow-down” structure prevents gaps, reduces friction, and keeps projects running smoothly.

Procurement and Planning: How Bay to Bay Mitigates Risk

Early procurement is key to controlling cost and schedule. When a project reaches buyout, we lock in pricing for key materials and equipment—especially those sensitive to global supply issues.

We collaborate with vendors, leverage regional supplier relationships, and explore domestic alternatives when possible. This approach minimizes delays, change orders, and surprises down the line.

(Ask Bay to Bay about an Operational Transparency Call to see how we proactively manage risks and keep projects on track.)

Our team also advises clients on moving from “just-in-time” to “just-in-case” procurement. In today’s market, ordering early—or exploring alternatives—can save significant time and money.

Partnering with Certainty

As we navigate 2025, global trade dynamics continue to shape the construction landscape. Tariff relief may help temporarily, but the smartest developers plan as if uncertainty is here to stay.

At Bay to Bay Properties, we build certainty through disciplined contracts, precise subcontractor management, and proactive procurement strategies. That’s how we protect our clients, their projects, and our shared vision for what gets built next.

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