US President, Donald Trump, shocked the world when he announced wide ranging import tariffs on many countries around the world on 2 April.
Why is this significant? The US is a global economic superpower, contributing around a quarter of global production with an annual GDP of around $27 trillion. On average, each person in the US produces around $82,000 of goods and services, compared to roughly $50,000 per person in the UK1.
Given the global importance of the US to the world economy, any change in its economic policy can have global repercussions.
However, all is not rosy in the States. It runs a large trade deficit. In 2023 this was around $775billion, with a surplus in services but a deficit in goods2. It has a very big national debt; $36trillion, or 123% of GDP3, equal to almost double the EU’s annual GDP. The Trump administration has deployed tariffs in a bid to reduce this deficit and debt.
What are tariffs?
Simply put, tariffs are taxes charged on the import of goods from foreign countries. The Institute for Government says that in the past, tariffs have been used as a source of revenue for governments, but nowadays they are mainly to protect domestic industries from foreign competition. Tariffs do this by increasing the price of imported goods in order to persuade consumers to purchase domestic products instead.
Why is President Trump imposing tariffs?
Introducing tariffs for those wishing to export to the US is perhaps one of the biggest disruptions to the global economy we've recently seen. While intended to mitigate the US trade deficit, market reaction suggests it’s a policy that will fail to bring prosperity, even to those it’s aimed to help. It's on the list of great recent economic tribulations along with the 2008 global financial crisis and the onset of COVID-19.
What does this mean for UK architects? It’s all highly uncertain, but President Trump's decisions may affect UK architects in four interconnected areas:
- Trade in architecture,
- Construction product and material supply,
- The economy
- The construction sector
How could Trump’s tariff affect trade in architecture?
The US trade deficit is in goods. It runs a surplus in services. Importantly, the US administration has not imposed tariffs on services, including professional services such as architecture. This means there are no tariffs on exporting architectural services from the UK to the US.
This is significant. UK architecture is globally successful4. Exports of architectural services account for around a quarter of Chartered Practice revenue, amounting to almost £1billion. North America is an important market. In 2024 UK Chartered Practice exports to North America were worth just over £110million, 12% of the total. The proportion was highest in 2020 when North America accounted for 21% of Chartered Practice overseas revenue.
On the downside, a likely US recession and reduced investment5 may dampen US demand for architectural services.
How could President Trump’s tariffs affect construction materials and products?
The manufacture and supply of construction products are less globalised than many other categories of goods.
To be simplistic, buildings are mostly - but not exclusively - made of big, heavy things. Those big heavy things - such as concrete, bricks, and cement - are expensive to move. It's more efficient to source construction products locally wherever possible unless they are high value and specialised. That said, trade in steel6, aluminium7, and timber8 are more global.
Trade in construction products between the UK and the US is relatively small. The ‘US customary’, rather than metric, system of measurements also adds friction to the construction product trade.
Around three-quarters of UK construction products are sourced locally9. Most imports come from the EU10, with whom we run a trade deficit. The bulk of US construction products come from within the US or from neighbouring countries11.
The immediate effects of tariffs on the availability of most construction products in the UK should not be pronounced. The increased costs of exporting to the US may, however, lead those who operate internationally to turn to the EU and UK markets, so growing supply and suppressing prices. This may alleviate cost pressures on construction projects.
How could Trump’s tariffs affect the economy?
Tariffs are a tax imposed by a country on imported goods, a tax paid not by the exporter, but by the purchaser. The long lasting consensus is that tariffs are best avoided; they create trade barriers, increase prices, limit choice, and lead to economic inefficiency by discouraging specialisation.
The global economy relies on low or zero tariffs for products and services to promote global growth and prosperity. There are a couple of reasons why this has been effective.
Firstly, specialisation brings efficiency, innovation and the benefits of localised expertise and agglomeration. When one or a small number of countries specialise in a particular good or service, costs decrease, and quality improves. Complex products, like cars and aeroplanes, often need highly specialist products from several countries.
Secondly, not all countries have all the goods or skills they need for themselves. The UK, for example, is a leading exporter of creative industries and is a global player in pharmaceuticals, finance, banking, and insurance. But it relies on imports for most consumer goods and much of its carbon energy.
Tariffs hinder prosperity. The effect of those imposed by the US will be a decrease in global growth. The markets are pricing this in, right now. Should trade wars break out, with retaliatory and escalating tariff imposition between countries, it will be worse. China looks to be taking this approach. The EU may follow.
This is bad news for the UK. While the UK has had the lowest of tariffs imposed upon its exports, the UK is a markedly open global economy. Any global downturn will directly affect the UK. A global recession is looking increasingly likely12, and this will - at best - dampen the UK’s already weak growth.
How could Trump’s tariffs affect the construction sector?
A weakened UK economy will lead to a weakened construction sector. Rising uncertainty may inhibit the long term capital investment necessary for construction projects. Falling consumer confidence and diminishing investment values may subdue the domestic sector.
There are, however, some upside scenarios.
Those who once exported to the US, now facing tariffs, may seek other markets, including the UK, so easing inflationary pressures. This, combined with the need to stimulate a faltering economy, may lead to interest rates falling faster than expected. High interest rates have worked against the construction sector for several years now. A faster-than-anticipated fall would help stimulate investment in buildings.
Further, as investors take flight from stock markets, government bonds are becoming increasingly attractive. Governments can offer a lower rate of return, so the interest, or yield, governments pay on their debt will fall, freeing up money for other things – including capital investment in the UK’s long neglected public estate.
What’s next for the world in the face of Trump’s tariffs?
US trade policies have brought heightened global uncertainty. That alone is sufficient to dampen growth, suppress the UK economy, and damage the construction sector. The effects of tariffs are playing out by the hour. There are realistic scenarios, none of them are good, but little is certain.
However, UK architecture is better placed than many sectors. The UK has low levels of tariffs, services exports are exempt, the construction sector is less reliant on trans-Atlantic trade than many, and a by-product of the turmoil may be interest rates falling faster than previously thought, facilitating capital investment in buildings.
Trump tariffs: timeline
Key moments that outline how President Trump introduced the import tariffs, from the Peterson Institute For International Economics:
- 20 January 2025: The US releases a memo outlining the Trump administration’s trade policies.
- 1 February: President Trump announces tariffs on imports from Canada, Mexico, and China.
- 4 February: The US imposes 10% on imports from China.
- 21 February: The US requests a re-examination of digital services taxes in some countries inside the European Union, the UK, Canada, and Turkey.
- 4 March: The White House announces an end to the 30 day pause and imposes a 10% tariff on imports of Canadian oil and energy products, and 25% on other imports. Tariffs also go into effects on Mexican imports, while tariffs on Chinese imports go up from 10 to 20%.
- 12 March: 25% tariffs on imports of steel and aluminium begin. EU and Canada announce retaliative measures.
- 26 March: President Trump issues a proclamation imposing 25% tariffs on automobiles and certain parts.
- 2 April: President Trump issues an executive order, invoking International Economic Powers Act to impose a baseline 10% tariff (starting 5 April) and additional reciprocal tariffs (starting 9 April) on countries that ‘contribute trade deficits’
- 3 April: 25% tariffs on cars go into effect, although tariffs on automobile parts are delayed.
- 4 April: China announces 34% tariffs in response (to take effect on 10 April)
- 5 April: 10% tariffs on almost all countries imposed.
- 9 April: President Trump announces a 90 day pause on tariffs to most countries, although he increases tariffs on imports from China to 125%.
Text by Adrian Malleson. This is a Professional Feature edited by the RIBA Practice team. Send us your feedback and ideas.
RIBA Core Curriculum topic: Business, clients, and services.
As part of the flexible RIBA CPD programme, professional features count as microlearning. See further information on the updated RIBA CPD core curriculum and on fulfilling your CPD requirements as a RIBA Chartered Member.
