3 ways US President Trump’s flurry of executive orders could impact construction
17 January 2025
Republican President Donald Trump is being inaugurated to the US’ presidency on 20 January, and he’s expected to sign a record number of executive orders on his first day in office. How will they impact construction?
US President Donald Trump signs an executive order in 2018 during his first presidential term. (Image: REUTERS/Carlos Barria)
Answers to that question will come with caveats, as a US president’s executive orders do not have the full effect of law.
However, federal agencies are bound to the directives of executive orders, which have the ‘force of law’. Ultimately, executive orders serve as inter-governmental policy dictations and can have drastic influences on industries.
News reports leading up to Trump’s inauguration suggested the president could deliver more than 100 orders on his first afternoon and evening in office. That figure would break his predecessor Joe Biden’s record of 17 (by a large margin).
With so many potential executive orders to digest, here’s a look at what construction can expect from the historic day.
1) Material prices likely to rise if hardline trade policy is enacted
President Trump has supported leveraging large tariffs on imported goods from multiple countries, but the biggest impact on US construction will be a proposed 25% tariff on materials imported from Canada and Mexico.
Tariffs can be unilaterally ordered by the president and will be one of the most immediate and impactful decisions made by the new administration.
If Trump sticks to an aggressive trade policy, construction will likely endure materials price hikes and supply chain issues.
A crane moves a delivery of steel coil. Steel is likely to see a price surge in the short term if President Trump’s proposed 25% tariffs on Canada and Mexico are enacted. (Image: Adobe Stock)
US-based law firm Crowell & Moring released a report titled “Proactive Strategies for Managing Tariff Impacts on Megaprojects” and detailed some of the segments hardline tariffs would impact most.
“Tariffs, in his second administration, may have a profound impact on megaprojects, including large infrastructure developments like highways, bridges, tunnels, airports, and railways, as well as large-scale energy projects like power plants, oil and gas facilities, and renewable energy installations,” the report stated. “Tariffs can lead to significant cost increases for construction materials, as Trump’s 2018 tariffs on aluminium and steel have shown.”
Crowell & Moring added examples of materials most likely to be affected: metals, coatings, plumbing components, HVAC parts, and electrical components such as transformers, circuit breakers and switchgear.
Assuming Trump follows through on his trade policy promises, enterprise consultancies have been singing a similar song regarding preparation: adjust supply chains where possible, communicate with providers and leverage new technology.
Calum Mair, commercial director in North America for EPD – an aftermarket parts and components seller for construction, agricultural, and industrial machinery – told Construction Briefing, “Businesses should prioritise cash flow management and explore alternative funding options to reduce dependency on loans, as well as adopting alternative materials and optimising resource usage in order to offset cost increases.
“Proactive planning is more important than ever and ensures resilience against interest rate volatility while supporting project feasibility.”
Crowell & Moring suggested creative contract language to meet the potential of pricing instability. The firm said using cost escalation clauses and unique scheduling commitments in contracts can help reduce unseen overruns and delays.
“Cost escalation clauses… seek to protect contracting parties against the risk of cost increases by providing an agreed method for adjusting a contract price when there has been a change in materials or labour costs,” the firm explained.
Crowell & Moring added it would be prudent for firms to revisit and adjust standard contracts, as needed.
“The clauses found in standard contract provisions may be inadequate in the context of significant cost increases due to tariffs imposed against foreign countries,” the report stated.
Similar for scheduling, the consultancy suggested firms reassess the language used in their standard contracts.
“Cost increases arising from tariffs that lead to the need to change suppliers or inability to purchase materials timely, for example, have the potential to cause project delays,” said Crowell & Moring. “Thus, it will be important for stakeholders to understand whether any project delays arising from cost increases and supply-chain disruptions that flow from new or changed tariffs constitute excusable or non-excusable delays.”
2) Strict orders on immigration could shrink labour market
An AI-generated image showing a queue of construction workers. Access to labour could be a struggle for construction companies at the start of President Donald Trump’s second term. (Image: Adobe Stock)
Trump is also expected to sign significant orders related to immigration. He campaigned on a broad deportation scheme targeting individuals residing in the US unlawfully or without documentation.
US construction relies heavily on immigrant labour. Immigrants account for about 31% of workers across all construction trades, according to US Census Bureau data. As such, industry reaction to potential mass deportations has caused some anxiety.
The US-based National Association of Home Builders (NAHB) said, “We must…pursue immigration policies that complement ongoing vocational training efforts and help fill labour gaps to ensure that the nation has a workforce that can meet its housing construction needs.”
NAHB, along with multiple construction trade organisations, have urged the incoming administration to expand existing temporary work visas. The group also supports laws that only regulate work authorisation verification for their direct employees (meaning a general contractor would not be punished if a subcontractor used undocumented labourers on a project), which is the current standard.
“Although NAHB does not support hiring undocumented workers, anything that provides a shock to the labour force could be detrimental to the construction industry and our labour supply and exacerbate America’s housing affordability problems,” the organisation noted.
EPD’s Mair mirrored those statements. He said, “It’s likely we will need to invest in workforce development programs, including training initiatives to attract and upskill domestic workers. Expanding the use of automation and construction technology should also help offset labour gaps.”
A labourer does work to a home’s roof. (Image: Adobe Stock)
Owners are encouraged to communicate with workers on temporary visas, help provide avenues for continued work authorisation and increase lobbying of the incoming administration to consider expanded opportunities for migrants to work in construction.
Meanwhile, human resource departments and managers are also encouraged to double-check work authorisations and ensure all employees retained are legal workers.
While the possibility of the government auditing a firm’s I-9s (forms used to verify employee identity and eligibility) or executing office/site raids remains low, an executive order by Trump expanding deportation could increase the likelihood that federal agents travel down this path.
3) Project labor agreements will be deregulated
US President Donald Trump speaks during a 2024 campaign stop in Michigan, US. (Image: REUTERS/Rebecca Cook)
A final set of executive orders contractors should look out for are regarding project labor agreements (PLAs).
PLAs are pre-hire contracts used in large federal construction projects that set terms for wages, working conditions, and dispute resolution before the project starts.
During his single term, President Biden issued an executive order requiring all federal projects valued more than $35 million require the use of PLAs, which was met with near universal condemnation by the US construction industry. Two contractor/builder trade organisations (Associated General Contractors of America and ABC, or the Association of Builders and Contractors) sued the Biden administration over this order.
US construction firms (particularly companies using non-unionised labour) are likely to react positively if Trump deregulates how PLAs are exercised on federal projects. At present, it’s believed current rules limit more than 80% of firms’ ability to bid on federal builds.
“Government-mandated project labor agreements discourage quality contractors and the more than 89% of the US construction workforce who are not members of a union from bidding and working on projects in their own communities funded by their tax dollars,” said ABC. “By preventing more efficient, effective local businesses from bidding on contracts to build roads, bridges, schools and other structures simply because they are unable to abide by the problematic and inflationary terms of the PLA, that guarantees that taxpayers pay 12% to 20% more and the local community benefits less.”
Even some aligned with the Biden administration have been critical of the former president’s order regulating PLAs. Last September, Democratic Governor of California Gavin Newsom vetoed an in-state measure that mirrored Biden’s PLA mandate. Newsom said he is “generally supportive of PLAs as an option”, but “the new requirements proposed in this bill could result in additional cost pressures that were not accounted for in this year’s budget.”
As a result, analysts expect that the bidding pool for major federal projects could grow. This could broaden what was a small pot of bidders on federal and state projects last year, with increased competition expected to help decrease costs on major projects.
Other ways Trump’s presidency could impact construction
President Donald Trump’s campaign slogan “Make American Great Again” on a red hat. (Image: Adobe Stock)
There are no certainties in politics, and it’s important to note that many of President Trump’s campaign promises may not come to fruition.
However, based on his first term and preliminary policy statements, construction can safely assume the new administration will prioritise deregulation, support further investment in infrastructure, and endorse expansion of private-led projects.
On easing regulatory standards, construction can expect permitting processes on federal projects to shorten. It’s also likely Trump would reduce environmental hurdles, particularly at it pertains to energy projects. Trump signed an order in his first term that demanded for each regulatory rule enacted, two must be cut. He’s supported expanding that initiative in his second term.
US-based law firm Maslon, in analysis of Trump policies, stated, “Trump’s pro-business bent will likely mean reduced regulations and streamlined permitting processes for new construction, making it easier and faster to start large projects. Trump has also supported energy policy that favours fossil fuels and is likely to put reduced focus on renewable energy projects.”
And renewable energy projects were a major focus of the Biden administration’s historic Infrastructure Investment and Jobs Act (IIJA), which (as of the end of 2024) had around $550 billion to allocate before the authorisation period ends in September 2026.
While some analysts suggest Trump could find a means to defund the IIJA, others say it’s more likely he would reposition the existing funding and seek to pass another round of infrastructure spending in the future.
Oil pumpjacks at sunset. Scenes like these may become more common under President Trump’s second term, as he’s committed to increased extraction of fossil fuels to meet the US’ energy needs. (Image: Adobe Stock)
Balaji Sreenivasan, founder and CEO of US-based construction technology firm Aurigo Software, told Construction Briefing, “The bipartisan IIJA was a huge step forward, but its $1.2 trillion allocation fell short of addressing the fundamental issues plaguing America’s infrastructure.
“Only 81.5% of investments made under the act so far have targeted core infrastructure like roads, bridges, and water systems. The remaining 18.5% was directed to climate-related initiatives, which, while valuable, diluted the impact on core infrastructure needs.”
Ultimately, analysts expect Trump to shift money away from large clean energy projects and toward more conventional civil infrastructure schemes.
And with that could be a shift toward more private sector-led programmes.
Maslon noted, “Trump’s infrastructure policies favour private sector–driven projects and public-private partnerships (PPPs), as well as more traditional projects such as roads, bridges, power plants, and industrial and fossil fuel facilities.”
Republicans have a narrow lead in both chambers of Congress over Democrats, which means – especially in the short term – that permanent legislation could be difficult to pass. That reality suggest President Trump’s executive orders will hold considerable weight, at the very least, to kick-off his second go at the presidency.
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