Download PDFOpen PDF in browserApproaches to Mitigating Material Cost Escalation and Volatility under the 2025 U.S. Tariffs in the Construction Sector: A Constructivist Grounded Theory Study10 pages•Published: June 2, 2026AbstractTrade tariffs affecting construction materials, including increased tariffs on imported steel and aluminum to 50%, applying a 50% duty on semi-finished copper, and imposing 10–25% tariffs on softwood lumber and related derivatives, have intensified price instability and compliance risk for U.S. construction contractors. Existing research models price escalation and examines macroeconomic impacts; however, little empirical research explains how contractors respond to tariff-driven volatility in practice. Using Charmaz’s Constructivist Grounded Theory, this study develops an inductively derived explanation of contractor decision-making under the 2025 U.S. tariff regime. Ten semi-structured interviews were conducted with general contractors, specialty contractors, and residential builders across multiple U.S. states. Data collection and analysis occurred concurrently using initial, focused, and theoretical coding until theoretical saturation was reached. The core category—manufacturing stability in volatile markets—shows that contractors assume pricing instability and proactively contain exposure before volatility materializes. Contractors achieve this through accelerated procurement and price locking, contractual transfer of tariff-related risk, strategic substitution of tariff-sensitive materials, and relationship-driven market intelligence. The findings indicate that contractors are responding not to higher prices alone, but to unpredictability. Stability, rather than lowest price, has emerged as the new basis of competition, extending existing escalation research by explaining how contractors proactively contain tariff-driven uncertainty.Keyphrases: construction industry, contractual risk transfer, material escalation, tariff volatility In: Wesley Collins, Anthony Perrenoud and John Posillico (editors). Proceedings of Associated Schools of Construction 62nd Annual International Conference, vol 7, pages 833-842.
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