As tariff pressures ripple across global supply chains, construction project owners may be feeling the squeeze—but that doesn’t mean they’re powerless. According to two construction law experts, even existing contracts offer avenues for mitigating the financial impact of new import tariffs, especially when it comes to high-cost materials and long-lead items.

“Though increased costs seem inevitable, there are steps owners can take to mitigate potential impacts, even on current projects,” write Stacy Bercun Bohm and Trav Clark, attorneys at Miami-based law firm Akerman. Both attorneys focus their practices on construction law and related litigation.

The Growing Tariff Toll

With global trade policies shifting rapidly, new tariffs on steel, aluminum, electronics, and a wide range of other imported goods are affecting sectors across the U.S. economy. In construction, these price hikes can throw off carefully calculated budgets and timelines.

Yet despite this uncertainty, Bohm and Clark urge owners to take a close look at their current contracts. “Owners should make sure that they understand the terms they’ve already agreed to,” the attorneys advise. They emphasize that price increases for materials are not a new issue in construction, and many contracts may already contain clauses that could help mitigate rising costs—even if they weren’t specifically written with tariffs in mind.

Understand Your Contract Framework

The type of contract in place is a key factor. “Look at the way project stakeholders agreed on price in the contract,” the attorneys explain. Common types include stipulated sum agreements, cost-of-the-work plus a fee, or cost-of-the-work with a guaranteed maximum price (GMP).

Each has its own implications. If the contract is based on a stipulated sum, owners should check for anti-escalation clauses that lock contractors into a set price regardless of outside circumstances.

If it’s a cost-plus arrangement, either with or without a GMP, there may be contractual obligations requiring the contractor to draw from contingency funds to cover material cost increases. There may also be provisions requiring early procurement or price-locking of high-value or long-lead-time materials.

“If your contract has one of these clauses, hopefully your contractor complied with its terms and locked in a price or purchased those materials before the tariffs went into effect,” the attorneys write. “If the contractor failed to do so, you may be able to hold them to a price they could, and should, have gotten before tariffs went into effect.”

Because every construction contract is unique, Bohm and Clark recommend that owners approach contract review with flexibility and professional support. “There is no one way to draft a construction contract, so it is important to review your entire agreement with an open mind on how certain terms may impact the parties’ rights with respect to tariff escalations,” they write. “If in doubt, contact an attorney to review your existing contract to give a full assessment of your options.”

Engage with Your Contractor Early

Contract terms aren’t the only tool available. Open communication with the general contractor (GC) is also key to managing unexpected tariff impacts. “No matter what the contract says, early and open communication with your general contractor is essential in trying to mitigate the impact of tariffs,” Bohm and Clark stress.

A good starting point is asking the contractor for a detailed list of any remaining materials that will be sourced internationally. This helps identify high-risk items that could be impacted by tariffs and enables owners and contractors to collaboratively seek solutions.

“If your contractor identifies materials that it planned to source internationally, you can still lessen the impact now,” the attorneys suggest. One step is to determine whether subcontractors have already included allowances for taxes, tariffs, customs duties, or related fees in their pricing. If not, the owner may want to ask the contractor to explore alternative sourcing—such as domestic suppliers—or consider whether materials could be prefabricated in-house to cut costs.

Don’t Forget the Paper Trail

In cases where cost increases are unavoidable, documentation becomes critical. Bohm and Clark recommend that contractors and subcontractors be required to substantiate all claims related to tariff-induced cost increases.

This documentation should include:

• Invoices showing the actual costs paid for affected materials, along with supplier details.
• Pre-tariff pricing expectations, to establish a clear before-and-after comparison.
• Port invoices with specific tariff charges and container IDs.
• Packing lists identifying the full shipment contents and the intended recipient.
• Citations of applicable tariffs, paired with explanations of how they’ve impacted material costs.

The attorneys note that these records can help owners assess the legitimacy of cost claims and determine whether any of the increased expenses might be absorbed by existing contingencies or procurement missteps.

Navigating Uncertain Terrain

“These are uncertain times for everyone in the construction industry, especially those who entered into contracts before these circumstances could have been reasonably anticipated,” write Bohm and Clark.

While it may feel like a perfect storm of cost volatility, material shortages, and supply chain disruptions, they emphasize that owners are not out of options. “No matter how bleak the situation may feel, owners should remember that there are always options for dealing with new circumstances and steps that can be taken to mitigate their impacts,” the attorneys write.

Their bottom line: Don’t assume that a signed contract locks you into escalating costs. Review your agreements, talk to your team, and seek legal guidance if needed. “If you find yourself in this position, take a look at the options you still have in your existing contract and consider reaching out to a construction attorney to discuss your options.”

Originally reported by Stacy Bercun Bohm and Trav Clark in Construction Dive.