Offsite construction teams across North America are navigating a challenging landscape as recent tariffs drive up material costs and extend lead times on critical components. The 25% import tariffs on steel and aluminum, along with Canada's counter-tariffs on $29.8 billion of U.S. goods, are creating significant ripple effects throughout construction supply chains.

Material Impact

The impact varies by material category, but several key inputs for prefab operations have been particularly affected:

• Copper Wire & Cable: With the U.S. relying on imports for approximately 45% of its copper supply, prices have already begun incorporating a "tariff premium" of 10% or more. Analysts project an 8-15% jump in copper costs in 2025, directly impacting shops that prefabricate wire harnesses and bus bars.
• Steel & Aluminum Components: Prefab teams are seeing double-digit price increases for conduit, strut, cable tray, and electrical enclosures. Aluminum products became 5-12% costlier almost overnight, with availability concerns mounting as some foreign suppliers reduce shipments.
• Transformers & Electrical Equipment: Perhaps the most severe disruption is in power distribution equipment. U.S. manufacturers currently meet only about 20% of domestic transformer demand, creating a critical dependency on imports. Lead times have expanded from weeks to 80-120 weeks for some equipment, causing project delays of 1-2 years in some cases.

The Canadian Home Builders' Association has warned that these trade measures will "drive up costs for consumers and no doubt slow down housing starts" – a prediction that appears to be materializing as project timelines extend and budgets strain under the weight of material cost increases.

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Industry Outlook

Construction-related imports totaled approximately $469 billion in 2022, with steel and metal imports accounting for $163 billion alone. The electrical components category represents a particularly significant vulnerability, with imports valued at $38 billion across switchgear, wiring, transformers, and related equipment.

Industry analysis suggests that transformer prices have surged 70-100% higher than 2020 levels in some cases, while the Atlantic Council reports that proposed tariffs on Mexican electrical components threaten to "significantly impact new electricity generation and transmission" projects.

Industry experts predict that tariff and trade tensions will likely continue in the near term, making proactive supply chain management essential for prefab operations that want to maintain predictable costs and schedules.

Building Resilience

While tariffs create immediate challenges, forward-thinking prefab teams are implementing strategies to protect their operations. A new comprehensive guide from Building Swell, "Beyond Disruption: Creating an Unbreakable Supply Chain", outlines practical approaches for prefab operations facing these challenges.

The guide highlights several key strategies:

1. Diversifying supplier relationships beyond single-source vendors, with particular emphasis on developing local/regional manufacturer connections
2. Implementing data-driven procurement systems that connect material ordering directly with project scheduling
3. Building manufacturing flexibility through digital "recipes" that document multiple approved assembly methods and material alternatives
4. Integrating supply chain considerations into project management through stage-gate processes that verify material availability before production

These approaches can help prefab teams maintain continuity despite the volatile supply environment created by recent trade policies.

For teams looking to implement these strategies, Building Swell's software platform helps prefab operations integrate procurement with project planning and maintain digital records of material alternatives. Learn more at info@buildingswell.com.

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