resident Donald Trump has signed several Executive Orders related to US trade policy, including setting tariffs on imported goods from multiple countries, with the intent to protect American industries. Many countries countered by issuing their own tariffs. Together, the actions are disrupting global supply chains and have created an atmosphere of uncertainty, which is affecting many businesses in all of Alaska’s major industries, construction included.

The construction industry is especially vulnerable to tariffs and other policy changes. “Construction depends more on imported goods than many other industries,” says Associated General Contractors, or AGC, of America Chief Economist Kenneth Simonson. “Canadian softwood lumber, for instance, is very important, especially to the single-family home building industry. If that gets cut off [due to the imposed tariffs], it’s going to make a difference in how quickly the projects can be built and what the substitute products would be.”

Supply issues reach beyond Canadian lumber. “Nearly all of the aluminum that’s used in the United States comes from abroad, particularly from Canada,” says Simonson. “While a lot of aluminum goes into the automotive or aerospace industries, aluminum is important for architectural features in building. Then there is a wide range of appliances, equipment, and machinery used in the construction industry that comes from a variety of countries. Much of it comes from China, so the proposed 145 percent tariff on China— or whatever percentage it ends up being—will definitely drive up the cost of a lot of construction projects.”

The reaction from other countries to US tariffs is a primary concern for the construction and other industries, he notes.

“My biggest concern about the tariffs is not cost; construction has certainly dealt with big cost jumps in the past, most notably in the year or two following the pandemic. But I’m really concerned about what other countries are doing and what they will do in reaction to our tariffs. First, the tariffs will affect many kinds of businesses. Manufacturers that depend on imported parts or components will be less competitive just because their costs are higher. But then, if other countries put tariffs on US products, that could close the door to some of those products,” explains Simonson, adding that AGC has already seen Canadians—on their own initiative—reacting strongly to the tariffs.

In addition to trade policy, changes to immigration policies are also affecting the construction industry across the country.

“Immigration so far this year seems to be running at zero. While Alaska was probably getting less immigration than other states, having it totally cut off will be another hardship, as construction is more dependent on foreign-born workers than many other industries. I would suspect that for some of the seasonal jobs, that is particularly true,” says Simonson.

“Another concern is the abrupt cut-off of federal funds through the cancellation or freezing of contracts and grants for many kinds of research for all sorts of projects, not specifically for construction projects necessarily, but when the owners suddenly find they don’t have the funds to do construction to support whatever they were going to put up that building for. All of these things create a huge amount of uncertainty and cause owners, whether public agencies, investors, or companies building for their own use, to put some projects on hold,” explains Simonson. “However, for the most part, contractors have not reported that they’ve been affected yet. Recession seems to be everywhere except in the data. However, there are plenty of reports, whether news stories or corporate owner reports, that investors are holding off on investments.”

While the uncertainty surrounding the proposed tariffs, trade negotiations, and policy changes affects all businesses, contractors have several options for managing this unusual situation.

“What I hear contractors talk about is putting larger contingencies into their bids and encouraging owners to agree to earlier purchases of materials if they’re the sort of thing that can be stored,” shares Simonson. “If there is a site that can store materials, the contractors will need an agreement on who will pay for the use of that storage facility, the insurance that may be required, and the risk that the specifications or the quantity might turn out to be wrong. So many projects go through modification as they’re underway or after the initial signing of a contract. Those are some of the things that are worth discussing between owners and contractors and always worth having communication on as early and as frequently as possible between the designers, the fabricators, the contractors, and the subcontractors. While those rules apply in any case, the consequences of not following them are greater in this setting.”

To assist contractors in uncertain times, AGC of America has created several resources.

AGC has an advocacy news website at advocacy.agc.org/news, which can be a useful resource for following anything in the administration that is important to your business, including executive orders, regulations, and tariffs.

The AGC Legislative and Regulatory Priorities 2025-2026 report, found online at advocacy.agc.org/priorities, outlines federal legislative and regulatory priorities that will promote and advance the construction industry.

AGC members can stay informed by weekly newsletters from Construction Advocacy in Action. Sign up at agc.org/news/newsletter.

And finally, a frequently updated page outlining recent tariff news and helping contractors navigate challenges related to possible tariffs: agc.org/tariff-resources-contractors.

“The US economy and its construction industry have shown incredible resilience over the last five-plus years. So, while I do feel that the risk of a downturn, even a recession, has gone up a lot, I believe construction will continue to grow after what may be a rough patch,” concludes Simonson. “We’ll move on. We’ve done it before.”