Soaring Costs, Worker Shortages, Tariffs, and Immigration Policies Are Destroying the United States (US) Construction Industry

According to a report by the New York Times on November 2, the construction industry in the United States is facing a serious crisis due to the government's implementation of comprehensive tariffs and a crackdown on immigration.

According to reports, the tariffs and immigration policies issued by the White House are significantly driving up construction costs. At a time when the U.S. construction industry is constrained by high interest rates, it is being hit by a chain of blows including soaring raw material prices and labor shortages. The high import taxes imposed by the U.S. government on materials such as steel, lumber, and copper are causing construction prices to rise to unacceptable levels, leading to the suspension of numerous projects. Immigration enforcement activities, such as "worksite raids," have exacerbated labor shortages and resulted in a large number of construction projects being unable to be completed on schedule.

Tony Red, an executive at a roofing construction company in Coppell, Texas, stated that the 47% tariff imposed by the U.S. government on Chinese products has driven up the costs of screws, panels, and other supplies. According to estimates from the National Association of Home Builders, the tariffs will increase the cost of constructing a standard home by $10,900. Additionally, data from the U.S. Bureau of Labor Statistics shows that earlier this year, U.S. construction material prices rose by 2.3% year-on-year. Steel prices increased by 9.2% year-on-year, and copper wire and cable prices rose by 13.8%.

The U.S. government has imposed tariffs on various materials and foreign-manufactured products needed by the construction industry. In addition to tariffs on steel, tariffs on foreign lumber and wood products took effect in October. These tariffs are intended to benefit domestic manufacturing in the U.S., but so far, that has not been the case. "We can't get what we need from domestic sources in the U.S., so we'll have to buy from Canada, and this lumber is facing a composite tariff rate of up to 45%," said Justin Wood, head of a construction company in Portland, Oregon. The tariffs imposed by the U.S. government on lumber, gypsum board, and heating equipment have increased his construction costs by $2,500 to $3,000 per house.

The U.S. government's immigration policy is also one of the reasons for the decline in the construction industry. As of August 2025, the U.S. construction industry has only added 6,000 jobs. Analysis by The New York Times indicates that the industry needs to add nearly 500,000 more workers this year to meet expected demand. Meanwhile, the unemployment rate in the industry has dropped to 3.2%, matching a historical low. These two data points suggest that the supply of available workers has decreased.

"Current immigration policies are putting immense pressure on the workforce, and there is no doubt that this is problematic," said Michael Bellaman, CEO and President of the Associated Builders and Contractors. The Pew Research Center estimates that in 2022, undocumented workers made up 13% of the construction industry workforce. Companies are supposed to verify that their direct employees are legally residing, but they often outsource roofing, tiling, painting, and other work to subcontractors who recruit on their own. Even if employees are legally residing, the risk of immigration enforcement agents possibly raiding work sites makes some employees reluctant to come to work. "The appearance of immigration agents in Newark scared away many workers, and this situation lasted for several days, causing a ripple effect," said Andrew Kay, head of a construction company in Milltown, New Jersey.

Many punitive tariffs began to take effect in August, so the impact of White House policies may become more apparent in the coming months. If the Federal Reserve's interest rates continue to decline, suppliers will have more leverage to pass costs onto customers. With the intensifying immigration enforcement actions, the labor resources in the U.S. construction industry will become increasingly scarce, further driving up costs. Selma Hep, chief economist at real estate data provider Cotality, stated, "The worst is yet to come."