Geopolitical factors
International trade policy comprises laws, practices, and regulations that manage trade with other nations of the world. The components of a trade policy can include customs duties, import tariffs, import quotas, export restraints, and trade agreements. Some of these elements can be used to restrict or promote trade to benefit and protect domestic industries.
About a year ago after ‘Liberation Day’ tariffs were announced, the construction market was affected.
‘The construction market in the United States is expected to be the most impacted by tariff policies and will slow throughout the latter half of 2025 and into 2026 as the uncertainty surrounding these policies affects prices for, demand for, and supplies of relevant imported building materials.’ (S&P Global, 2025)
The impact
Tariff uncertainty is leaving a larger impact on the non-residential structures since steel and aluminum are still used widely in these buildings in addition to the lack of workforce due to immigration policies.
Supply constraints and rerouting of supply impact not only the price but also project timelines due to delays in receiving materials. Some developers may opt for project cancellations and postponements to reduce the demand and potentially lower the price effects.
All these are risks that do not dwell well with investment. Hence, a lot of investment got sidelined with hopes that there is more clarity surrounding tariff policy and stability from the on-going war.
How does construction accounting come into play?
When multi-billion-dollar projects get pushed or cancelled, timing and visibility will make a world of difference. Contractors struggle because:
- Costs keep flowing (payroll, subs, materials, equipment)
- Expected billings don’t start on schedule
- Cash tied to AR, retainage, and WIP becomes harder to predict
- Pipeline volatility turns into a liquidity problem, not a profitability one
What if you can see and react to the situation before cash gets tight? When projects stall, receivables timing matters more than backlog. Being able to see aging by project, customer and retainage or identify which invoices are slowing down in real time gives you the advantage of knowing your cash exposure weeks or even months ahead of time. That is AR aging.
When projects pause, leadership will often ask, “Are we losing money?”
The better question to ask is this.
Where is cash temporarily trapped?
Is there over or under billings in WIP? Is there costs that haven’t hit cash yet? Being able to separate delays from losses will allow better clarity on timing against performance.
With that in mind, it’s better to have an accounting software that enables daily liquidity check-ins, early warnings when backlog volatility threatens cash and fact-based conversation with lenders and investors.
Sage Intacct's real-time AR/AP tracking and cash flow dashboards give contractors the visibility to manage pipeline volatility before it becomes a liquidity problem.
In summary:
- Import tariffs are one of the components of a trade policy that can be used to restrict or promote trade to benefit and protect domestic industries.
- Projects are cancelled or delayed because of fluctuation in the commodity pipeline and supply prices.
- Better visibility in construction accounting allows for better damage control.
References
Anton, J., Chang, K., Clarke, M., & McCartin, T. (2026, March 20). Commodity Price Watch: March 2026. Retrieved from S&P Global: https://www.spglobal.com/market-intelligence/en/news-insights/research/2026/03/commodity-price-watch-march-2026
Li, H., Park, Z., & Wang, Y. (2025, December 19). Trade policy uncertainty and supply chain disruptions: Firm-level evidence from “Liberation Day”. Retrieved from VoxEU Centre for Economic Policy Research: https://cepr.org/voxeu/columns/trade-policy-uncertainty-and-supply-chain-disruptions-firm-level-evidence-liberation
Lin, H., Wang, Y., & Park, Z. (2026, January 21). Trade Policy Uncertainty and Supply Chain Disruptions: Evidence from “Liberation Day”. Retrieved from Cato Institute: https://www.cato.org/research-briefs-economic-policy/trade-policy-uncertainty-supply-chain-disruptions-evidence?utm_source=chatgpt.com
Ozdemir, L., Vurur, N. S., Ozen, E., Swiecka, B., & Grima, S. (2025). Volatility Modeling of the Impact of Geopolitical Risk on Commodity Markets. Multidisciplinary Digital Publishing Institute, 1-32.
S&P Global. (2025, July 21). US tariffs: Impact on the US construction industry. Retrieved from SP Global: https://www.spglobal.com/market-intelligence/en/news-insights/research/us_tariffs_mpact_us_construction_industry
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