Construction sector leaders, including Balfour Beatty chief executive Leo Quinn, have warned that US tariffs on the UK will raise prices and reduce demand for steel.
Speaking yesterday (12 March) during a presentation on his company’s annual results, Quinn warned that main contractors will need to tread “very carefully” to decrease the impact of the steel tariffs on the supply chain.
US president Donald Trump yesterday introduced global tariffs of 25 per cent on steel, aluminium and all steel derivatives, raising concerns among the metal manufacturing and construction sectors.
Ahead of the introduction of those tariffs, Quinn addressed Trump’s plans to increase tariffs on Canadian steel and aluminium from 25 per cent to 50 per cent. Trump later decided to row back those changes.
“When [the US] puts steel tariffs up by 50 per cent on Canada, we need to be careful because we carry a big backlog and it all goes into the subcontract base,” Quinn said in a statement following the firm’s annual results.”
He added: “Our risk doesn’t sit with us, it sits with the subcontract base and […] it flows back to the customer.”
Quinn called on main contractors to be “very, very careful” to limit the tariffs’ impact on the construction sector supply chain.
In 2024, the US was the third biggest importer of UK steel, to the tune of £368.2m, according to the International Steel Statistics Bureau (ISSB).
David Crosthwaite, chief economist at the Building Cost Information Service (BCIS), warned that the biggest concern for the construction sector “is the potential for supply chain disruption and greater volatility in steel prices”.
He said the impact would come in the long term, especially if domestic steel producers struggle to compete.
“For industries like construction, where investor confidence is key, this kind of uncertainty can be particularly damaging,” he warned.
While he acknowledged that the tariffs may be suspended to lessen the impact, he warned the “knock-on effects of escalating global trade tensions will be hard to ignore”.
Gareth Stace, director of steel industry trade body UK Steel, said that the “hugely disappointing” tariffs “couldn’t have come at a worse time for the UK steel industry”.
In particular, he pointed to the impact of high energy costs and subdued demand for steel from UK industry.
“It is essential that the UK government not only continues efforts to negotiate exemptions with the US, but also takes decisive action to bolster our trade defences,” he added.
“We greatly appreciate all the efforts that have been made so far and will continue working closely with our government to secure the best possible outcome.”
The cost of building materials started to soar at the beginning of the Covid pandemic, as production lines for steel, timber and other materials slowed.
Inflation has since pushed material costs even higher. In September – before the election of Donald Trump – the BCIS warned that build costs were set to increase by 15 per cent in the next five years, largely down to labour costs.
UK business and trade secretary Jonathan Reynolds said it was “disappointing” that the US had imposed global tariffs on steel and aluminium.
But he added that the UK government was “rapidly negotiating a wider economic agreement with the US to eliminate additional tariffs and to benefit UK businesses and our economy”.
Reynolds also pledged to “remain resolute in our support for UK industry”.
The UK government last month announced that it would support the steel industry with £2.5bn of investment through the National Wealth Fund.
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Joshua Stein