Where Tariff Costs Actually Land on a 2026 Construction Budget

Steel has carried a 50 percent tariff since the rate doubled in June 2025. Copper and brass mill shapes are up about 21 percent over the past year. Imported kitchen cabinets hold a 25 percent tariff through the end of 2026. If you are capitalizing or signing a project in Boston this summer, here is what is actually in effect and where it lands on a real build.

The current tariff stack

The rules moved again on June 8, 2026, so this is the stack as of this writing.

• Steel, aluminum, and copper (50%). Base items made entirely or mostly of these metals.
• Derivative metal products (25%). Exempt if under 15% metal content.
• Imported cabinetry and millwork (25%). The scheduled jump to 50% was delayed to January 1, 2027.
• Metal-intensive equipment (15%). A reduced rate on select industrial and HVAC equipment through 2027.
• Softwood lumber (10%). Framing lumber.
• US metal fabricated abroad (10%). Now requires 85% US content to qualify.

The June 8 update did not touch the headline metal rates. It widened the reduced-rate equipment bucket, exempted low-metal-content products, and eased the US-content rule. These are the rates active today, not policy speculation.

What it costs at the project level

Cushman & Wakefield’s running analysis estimates the current tariff package adds about 6 percent to construction material costs against a 2024 baseline, and roughly 3 percent to total project costs.

The sharper numbers come from the Associated General Contractors’ analysis of recent producer-price data.

• Aluminum mill shapes, up 37.3 percent, the steepest sustained run since 2022.
• Copper and brass mill shapes, up 20.9 percent.
• Steel mill products, up 13.3 percent.
• Framing lumber, up 6.8 percent.

One detail owners miss, the fabrication trap. Products made abroad with American-sourced metal still carry a 10 percent duty, domestic raw material does not remove exposure if the fabrication happens overseas.

Three percent on a total project does not sound dramatic until it is a real number. On a $1.5M new build it is $45,000, on a $500K luxury kitchen-and-bath package, $15,000. The 6 percent at the materials level matters more for planning. If your contractor budgeted $400,000 of materials and did not price tariffs in, that is roughly $24,000 of unaccounted cost sitting in the project.

Materials are not the whole cost story

Tariffs are the visible half of the cost story. Labor is the quieter half, pulling the same direction. Roughly 94 percent of contractors cannot fill open positions, and the industry needs about half a million more workers nationally in 2026 to keep pace. That keeps Boston-area trade rates elevated no matter what materials do, so when a 2026 number lands above a 2024 number, tariffs are part of it, but tight, well-paid trade labor is the part that never shows up on a commodity price chart.

Where it lands in a build

The impact concentrates in three areas. Metal structural and trim work takes the direct 50 percent hit on its import portion, structural steel, copper supply lines, aluminum window and door packages, and metal roofing. Internationally sourced cabinetry and engineered wood carry the 25 percent derivative rate, so an imported cabinet package runs noticeably higher than a domestic one. Imported HVAC units and electrical panels run through the metal-equipment category. Stone fabricated domestically, domestic millwork, ceramic tile from non-tariffed countries, US-made plumbing fixtures, and paint stay unaffected.

Who absorbs it comes down to the contract

On a lump-sum contract signed this summer, the contractor prices current tariffs into the bid, so 2026 projects run natively more expensive than 2024 ones and the client carries the capital risk. On time-and-materials or cost-plus, the risk falls entirely on the client as actuals land, with no buffer. The most exposed position is a fixed-price contract with new scope added, where the original scope keeps 2024 pricing but every change order is priced at summer 2026 rates, so the blended cost only moves one way.

How we bid it, and what to ask any GC

For any project we bid this summer, three moves dictate how we allocate capital, and each is a question worth putting to any contractor before you sign.

1. We name the line items most likely to move and document the sourcing assumption behind each, domestic, import, or mixed, so you see exactly what you are underwriting. Ask your GC which line items carry meaningful tariff exposure, and what source they assumed for each.
2. We tag a material price validity window on every bid, and re-audit those line items if the project does not break ground for 90 days. Ask what the validity window is on the materials portion of your bid.
3. We push for domestic sourcing where the spec allows it. On a recent $2.5M luxury renovation bid in Back Bay, we tagged the custom shower enclosures and imported tile as tariff-exposed and held a strict validity window on materials. Ask whether change-order materials are priced at the original bid date or the change-order date.

The answers tell you the real risk you are taking, and whether the contractor actually understands their own supply chain.

If you are scoping a development or renovation in Boston, Wellesley, or the surrounding markets, reach out before you finalize the bid. We are tracking the budget impact on enough active projects this summer to walk through the math with you directly.