Construction businesses across the U.S. are bracing for the impact of new and anticipated tariffs on imports from China, Mexico, Canada and other countries. And with costs of raw materials and equipment likely to rise, decision-makers in the sector realize their supply chains may be less resilient than anticipated.
In a January survey, 31% of supply chain executives said they planned to adjust supply chain networks and strategies in the coming year, while 21% are preparing to expand U.S.-based manufacturing.
Amid ongoing market uncertainty, visibility has emerged as a critical lever for businesses striving to maintain control. From material sourcing to compliance obligations, the downstream impact of tariffs is forcing the industry to rethink long-held assumptions about supplier relationships and operational risk.
Real-time insights into sourcing origins, supplier exposure and regulatory compliance are vital for developing the foresight required to remain agile. With greater visibility into vulnerabilities, businesses can identify roadblocks sooner, manage compliance more proactively and respond faster to shifting trade policies.
The Hidden Complexity of Modern Supply Chains
Construction supply chains are more global and layered than ever before. A single finished product, e.g., an HVAC unit or concrete additive, may involve raw materials sourced from four or five tiers, some of which originate in countries directly affected by tariffs or labor scrutiny.
While businesses may have insights into their Tier 1 and Tier 2 suppliers, deeper layers within the supply chain often remain difficult to track, which creates hidden vulnerabilities. For example, a company may believe it's protected from tariffs because it's sourcing from U.S.-based suppliers (Tiers 1–3). However, if a Tier 4 supplier who provides raw materials to a Tier 3 U.S. manufacturer is located in China, those materials may still trigger tariffs. Without complete transparency into the supply chain, companies may underestimate their exposure, subjecting them to tariffs they thought they were avoiding.
The impact is already being felt. Material costs jumped significantly in recent months. For example, the cost of steel surged 15% to 25% since the beginning of January, while aluminum is up 8% to 10%, and lumber has risen as much as 15%.
Tariffs and related trade pressures directly affect high-use construction inputs such as rebar, ductwork, piping, and aluminum curtainwall systems, underscoring the need for visibility to cost forecasting and risk mitigation.
Implementing new tariffs typically initiates a wave of internal reviews, spurring procurement renegotiations, contract updates and supplier assessments. Without a shared foundation of accurate data, the process is rarely smooth.
Building Transparency into the Foundation
Companies that view their suppliers merely as cost centers miss the opportunity to collaborate on shared challenges. A supplier’s ability to provide verifiable data on sourcing, labor practices and regulatory compliance can become a key differentiator.
Leading organizations are investing in supply chain transparency technologies and practices far beyond the basics. Here’s how organizations can take control of their supply chains in a volatile trade environment:
1. Map the entire supply chain
Mapping an organization's supply chain begins with a comprehensive evaluation of all supplier tiers, tracing products and materials back to their points of origin. This process uncovers the often-overlooked dependencies across multiple tiers and geographies, helping businesses anticipate where risk may accumulate.
Organizations should take a risk-based approach, focusing on factors like price fluctuations, regulatory exposure, or sustainability to align with operational priorities. It is essential to identify key sourcing regions and where tariffs may apply, including evaluating those areas' geopolitical and economic stability and any vulnerabilities to shifting trade policies.
Moreover, supply chain mapping should be approached as a continuous process, with updates made regularly as networks evolve through new vendors, acquisitions or policy shifts. A current view of the supply network enables businesses to conduct scenario planning, prioritize supplier engagement and implement contingency plans to reduce disruption and cost.
2. Gather high-quality supplier data
A complete understanding of the supply chain hinges on high-quality supplier data, made possible by the right mix of technology and regional expertise.
Supply chain visibility tools surface real-time data into sourcing locations, regulatory risks and supplier performance. These technologies allow businesses to monitor suppliers' compliance status, identify high-risk geographies and stay current on shifting trade policies. More advanced implementations also support supplier segmentation and scenario modeling, helping teams evaluate how changes like a new tariff or regional disruption could impact their supply network.
However, technology alone isn't enough. Successful implementation depends on a globally minded team with the tools, cultural fluency, and regulatory knowledge to effectively engage suppliers. A tactical onboarding strategy that incorporates regional expertise ensures data is not only captured but also accurate and actionable.
Partnering with industry networks can also reduce duplication, align transparency expectations, and streamline collaboration to help suppliers to participate, share data and meet compliance requirements.
3. Optimize supplier networks
Trade policies can change quickly and tariffs targeting specific countries or regions may force businesses to reassess their sourcing strategies on short notice. It’s essential to have a comprehensive view of the supply network to avoid hasty pivots, which could introduce new risks.
By identifying potential disruption points, like regions impacted by environmental stress, labor rights violations, or economic sanctions, companies can make informed adjustments before issues escalate. Creating redundancy by securing multiple suppliers for critical materials also ensures greater flexibility in response to sudden tariff changes or geopolitical events.
Businesses must evaluate suppliers beyond cost and consider long-term viability, regulatory alignment and sustainability. For example, shifting sourcing away from regions prone to forced labor, deforestation or water scarcity helps the organization mitigate risk and stay compliant with evolving trade and sustainability standards. By expanding evaluation criteria, businesses are better equipped to respond strategically to tariff pressures without compromising values or regulatory obligations.
4. Collaboration for long-term success
Establishing resilient supplier relationships starts with shared visibility into risk factors, expectations and performance benchmarks.
Involving suppliers early in risk assessments and problem-solving discussions fosters stronger collaboration. When suppliers are treated as partners rather than vendors, they are more likely to share critical data, align with compliance goals, and invest in long-term reliability.
Open lines of communication, such as regular touchpoints, transparent reporting structures, and joint contingency planning, all contribute to a healthier, more responsive supply network. In addition, suppliers who feel valued are more inclined to prioritize a business's needs during times of scarcity or crisis.
Businesses that cultivate trust-based partnerships can more effectively navigate evolving trade landscapes, manage reputational risks, and unlock opportunities for continuous improvement.
A Competitive Advantage Amid Uncertainty
In an industry built on solid foundations, visibility is one of the most critical building blocks of long-term success. As tariffs reshape cost structures and supply dynamics, organizations need long-term strategies to make their procurement processes resilient to market evolutions.
Mapping supply chains, leveraging real-time data and fostering supplier collaboration all contribute to a more agile procurement approach that can help withstand global trade pressures.
The cost of operating without visibility extends beyond higher material prices to factors such as fractured supplier relationships and avoidable project delays. These risks all become more likely in the absence of reliable data.
