President Donald Trump is preparing to scale back some tariffs on steel and aluminum goods, three people familiar with the matter have told The Financial Times. For commercial real estate owners, developers and lenders, the move introduces a potential turning point in materials pricing and project feasibility across multiple asset types, especially metal‑intensive industrial and large‑format assets.
According to sources in the report, the Trump administration is reviewing the list of products subject to steel and aluminum tariffs of up to 50 percent that were imposed last summer and later extended to a broad range of downstream goods, from appliances to common household items.
Officials now plan to exempt some items, stop expanding the lists and instead pursue more targeted national security investigations into specific products, according to people familiar with the process. Trade officials at the Commerce Department and the U.S. Trade Representative's office have concluded that the existing levies are raising prices on items such as pie tins and food and drink cans, adding to the wider affordability squeeze on US consumers.
Steel and aluminum tariffs flow directly into the cost of key construction inputs, including structural steel, roofing, cladding, mechanical equipment and a long list of finished products used in tenant build‑outs.
Industry analyses indicate that tariff‑driven increases in metals prices have been a major contributor to higher construction costs, with several studies estimating mid‑single‑digit to high‑single‑digit percentage increases in overall project costs when tariffs are fully in effect.
For CRE projects, that cost pressure has shown up in higher bids, tighter contingencies, and, in some cases, delayed or canceled developments as sponsors reassess returns under a more expensive cost basis.
An easing of tariffs on selected steel and aluminum products would not immediately reverse these pressures. Still, it could slow or partially relieve materials inflation and pricing volatility for projects now in planning or pre‑construction. Developers and construction lenders may gain greater confidence in underwriting long‑duration projects if tariff policy becomes more predictable and the list of affected items is narrower and easier to interpret.
The impact of metals tariffs, and any subsequent relief, is most acute in sectors that are heavily materials‑intensive, such as industrial warehouses, manufacturing facilities, data centers and big‑box retail, where steel and aluminum account for a large share of structural and systems costs.
Projects in these categories have been particularly exposed to swings in imported-metal prices and tariff classifications, with some sponsors reporting higher contingencies, value engineering or phased construction to manage risk.
More broadly, the tariffs have contributed to an affordability crisis that is filtering through to tenants and end‑users, especially in consumer‑facing sectors. Higher prices for everyday goods and packaging, including canned food and household items, put pressure on retail margins and household budgets, which in turn influences rent growth, occupancy and expansion plans for retail and some service‑oriented tenants.
Any moderation in tariffs on widely used metal products could therefore provide modest relief to consumer‑exposed tenants and support demand in shopping centers, neighborhood retail and select mixed‑use assets over time.
The current system, run largely through a Commerce Department "inclusion" process that allows US companies to nominate foreign suppliers and products for tariffs, has produced a sprawling and sometimes inconsistent list of affected items. One European business leader told The Financial Times of a company that shipped four identical containers of machinery to the US and was charged different tariff rates on each, underscoring the administrative complexity and unpredictability importers face.
Under the existing regime, US businesses have actively lobbied to impose tariffs on steel and aluminum products from rival foreign producers, arguing that these goods pose national security risks. The Commerce Department has generally approved many of these requests, which now cover a wide range of household and industrial items from bicycle parts to cake tins and mattresses.
The result is a patchwork tariff structure that officials inside the administration now view as too complex to administer and enforce consistently, prompting the current effort to narrow and clarify the lists.
The Commerce Department's most recent opportunity for companies to nominate foreign suppliers for tariffs, launched in October, missed its own 60‑day processing timeline, adding further uncertainty for businesses trying to price future imports. Nearly 100 filings in that round alone illustrate how many sectors now argue that their products are essential to national security, including one company that claimed that, without bread and similar baked goods, US soldiers would be unable to maintain a healthy diet.
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