For a brief moment, the commercial real estate sector enjoyed a respite from tariff anxieties. That calm was shattered when President Donald Trump announced a sweeping 50% tariff threat on copper, a metal as vital to commercial real estate as steel and aluminum. The administration quickly followed with a new threat: a 35% duty on imports from Canada.
Copper’s role in CRE is foundational. It’s essential for electrical wiring, plumbing, HVAC systems, and the electronics that monitor building operations and power telecommunications networks. In industrial settings, copper’s importance is even greater, underpinning everything from power grids to data centers.
A Bloomberg report indicated that refined copper was expected to be targeted by the new tariffs. There was initial uncertainty about whether semi-finished copper products—such as wires, sheets, tubes, and plates—would be included, but it appears the tariff will apply to all of them. Copper prices spiked to historic highs following the announcement, though they have since receded somewhat. The new duties are slated to take effect on August 1.
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“We haven’t seen any immediate impact. I think it will take a little time before it gets to us,” says Sean Ouellette, chief operating officer of KAST Construction. “But these larger tariffs, if they get enforced ultimately, they will have an impact on the supply chain and pricing.” Ouellette added, “Until there’s clarity, it’s tough for our clients and ourselves to know how to handle the current situation. With a lack of clarity in our business, people don’t know where to put their money.” This uncertainty extends to subcontractors who work with copper and related materials.
While the immediate effects of the copper tariff are significant, Lynn McKee, director of the Master of Science in commercial real estate program at Georgia State University’s Robinson College of Business, told GlobeSt that the issue extends far beyond a single material. “Nearly every component of a commercial building uses large degrees of imported materials, be it lumber, concrete, steel, gypsum, copper, etc.”
The 50% tariff on copper will impact both development projects and existing buildings undergoing renovation or routine maintenance of systems, McKee added.
The threat of a 35% tariff on Canadian goods also looms large. President Trump announced the move in a letter to Canadian Prime Minister Mark Carney on social media, warning, “If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them be, will be added onto the 35% that we charge.”
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