The U.S. recently imposed tariffs on imported steel and aluminum from China and nearly every other country in the world, except for Canada, Mexico, Argentina, Australia, Brazil, South Korea and the EU. In total, the U.S. has recently imposed $250 billion worth of tariffs on Chinese exports. Structural steel, in particular, is a critical long-lead-time material for new commercial construction. These tariffs have caused significant concern within the construction industry with respect to the cost and availability of building materials, as well as the contracting parties’ relative risks and responsibilities over increased costs caused by tariffs.
Before the U.S.’ recent change in trade policy, interference from the government was seldom considered among the likely risks for a construction project (outside of the customary governmental involvement in entitlements, permits and inspections). As a result, few construction contracts address the circumstances of a “Change-in-Law,” such as the imposition of a new ordinance, tax or tariff. Indeed, most standard form contracts in the construction industry are silent as to a Change-in-Law.