Recent trade policy updates under President Donald J. Trump are introducing important changes to how tariffs are applied to steel, aluminum, and copper materials that are foundational to the electrical construction industry. Through an April 2 presidential proclamation and accompanying fact sheet, the administration has outlined a more tailored approach under Section 232 that aims to strengthen domestic manufacturing while refining how tariffs impact downstream products.
For IEC members, these changes and new tariffs on foreign products and materials are highly consequential. Electrical contractors rely on a wide range of products—from conduit and wire to transformers and grid equipment—that are deeply tied to global metals markets. The updated framework distinguishes between products made almost entirely of steel, aluminum, or copper and so-called “derivative products,” creating a more nuanced tariff structure that will directly influence pricing and procurement strategies.
Under the new policy, items made almost entirely of covered metals—such as steel coils or aluminum sheet—will continue to face a 50% tariff. However, for derivative products that are substantially composed of these materials, a flat 25% tariff will now apply to the full value of the product. At the same time, products containing 15% or less of these metals will no longer be subject to tariffs at all. For many electrical components that incorporate smaller amounts of metal inputs, this threshold could provide meaningful relief and improve sourcing flexibility.
The policy also introduces two important carveouts that are especially relevant to IEC contractors. Certain metal-intensive industrial equipment and electrical grid equipment will be subject to a reduced 15% tariff through 2027—an acknowledgment of the critical role these products play in infrastructure development. Additionally, products manufactured overseas but using American-produced steel, aluminum, or copper will face a lower 10% tariff, creating an incentive to incorporate U.S.-sourced materials into global supply chains.
For domestic manufacturers these distinctions matter.
“The updated framework could help level the playing field against foreign competitors benefiting from subsidized inputs, while also encouraging greater use of domestically produced metals,” IEC lobbyist Ben Brubeck, president and CEO of Government Affairs Solutions, said. “For contractors, a stronger domestic supply chain offers the promise of improved reliability and reduced exposure to global disruptions.”
At the same time, IEC members are carefully evaluating how these changes will play out in practice.
Recent analysis from Associated Builders and Contractors highlights the cost pressures already facing contractors. Since February 2020, construction input prices have increased by more than 45% overall, with key materials like iron and steel (63.6%), copper wire and cable (83.7%), and electrical components (70.5%) experiencing even greater inflation. While prices have moderated from peak levels, contractors continue to face elevated baseline costs and ongoing uncertainty.
Construction input prices rose 1.3% in February alone. More notably, prices climbed at a “staggering” 12.6% annualized rate over the first two months of 2026, reflecting continued volatility in the very materials targeted by tariff policy. In this environment, even well-intentioned tariff adjustments can have an outsized impact on project costs, particularly for small and mid-sized contractors bidding work months in advance.
Many products used in electrical construction fall into gray areas between “core” and “derivative” classifications, and even modest tariff adjustments can affect project costs—particularly for small and mid-sized contractors operating on tight margins. Clear guidance and consistent implementation will be essential to avoid confusion and ensure that businesses can plan and bid projects with confidence.
A balanced tariff approach that advances domestic manufacturing goals while recognizing the operational realities of the construction industry might yield the best results. Predictable timelines, transparent classifications, and coordination with broader infrastructure policy will be key to ensuring that tariff changes strengthen—rather than further disrupt—the supply chains that power America’s economy.
Please share your tariff-related industry intelligence with the IEC Government Affairs team to help shape IEC’s advocacy efforts.