Will U.S. tariffs derail the UK’s construction cost recovery?

The impact of 'Liberation Day' on the world's stock markets has been immediate and significant, but how will Trump's tariffs affect rebuild costs?

On 2 April 2025 – dubbed “Liberation Day” by the U.S. President – the United States unveiled sweeping import tariffs that sent ripples through global markets​. These included a blanket 10% tariff on all imports from the UK​, alongside steeper duties for other major economies, such as 20% on EU goods. There has since been some back-tracking, but the percentage on Chinese goods has gone way over 100%, and could go even higher. In addition, targeted levies were introduced in March, notably 25% tariffs on all steel and aluminium entering the U.S. The idea is to protect American industries by making foreign products pricier in the U.S., but such moves carry worldwide implications.

After years of climbing rebuild costs, the UK construction sector has finally started to stabilise. However, just as the dust begins to settle, a new geopolitical wildcard has entered the frame: sweeping U.S. tariffs.

Take a deep dive into how the U.S. tariffs could affect rebuild costs in our report below.

Recent data offers a cautiously optimistic outlook. Prices for major construction inputs like structural steel and timber have either levelled off or dropped slightly year-on-year. Government indices even recorded a modest 0.9% annual decline in material prices this January.

But industry experts are watching the tariff situation closely.

“Most of the UK’s key construction materials are sourced locally or from Europe,” says Sharon Masters, Surveyor & Technical Lead at RebuildCostASSESSMENT.com. “So the immediate impact of U.S. tariffs is minimal. The bigger concern lies in the indirect effects – how supply chains shift, how currencies react, and whether volatility returns to the materials market.”

Steel and timber are especially sensitive. A surplus of steel diverted from the U.S. could drive prices down in Europe, or spark protectionist measures in response. Meanwhile, European timber suppliers may redirect goods to the UK if U.S. demand weakens, creating short-term bargains or longer-term instability.

This broader concern is echoed by PwC, which notes that tariffs could increase claims costs in the home and property insurance sectors. As import duties raise the price of materials used in repairs and rebuilds – such as timber and steel – insurers may see higher outlays in the event of damage. These pressures, while not immediate, add to the argument for close monitoring of rebuild values and potential knock-on effects to policy pricing.

‘You’re likely still underinsured’

Even with inflation easing, the underinsurance problem hasn’t gone away. Many buildings are still insured based on outdated valuations, leaving owners exposed in the event of a claim.

“Lower inflation doesn’t roll back the price increases of the past three years,” says Sharon. “If you haven’t reviewed your property’s rebuild value recently, you’re likely still underinsured. And with new global factors at play, the case for reassessment has never been stronger.”

The cumulative effect of previous cost surges means that a rebuild today could easily exceed expectations by tens of thousands of pounds. And if global inflationary pressure reignites, that gap may widen again.

Don’t wait for the next cost spike to review your cover. Start with a professional desktop rebuild assessment from RebuildCostASSESSMENT.com – fast, accurate and fully compliant with RICS standards.

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We've taken a deep dive into the impact of the U.S. Tariffs on the UK rebuild cost outlook. 

Read the full report here