Tariffs Squeeze Contractors on One End, Washington Mills on the Other

Material tariffs are reshaping cost structures across the Pacific Northwest construction industry in 2026 — and the effects are landing on both sides of the supply chain in ways that don’t cancel each other out.

On the buying side, steel, aluminum, and copper products have carried a 50 percent tariff since early 2026, with derivative products at 25 percent, and softwood lumber carrying its own 10 percent tariff (25 percent on derivatives). Nonresidential construction input prices reportedly surged at their fastest pace since the 2022 supply chain disruptions in the first two months of the year.

Locally, the picture as of August is more stable than the headline tariff numbers might suggest. Eastern Washington framing lumber has settled into a narrow trading range — not cheap, but not the volatile spikes seen in prior years — as mill production has largely caught up with demand nationally.

That stability hasn’t extended to the mills themselves. Washington’s timber industry is dealing with its own cutbacks, squeezed by the combination of tariffs, regulatory change, and a soft housing sector. Lumber prices and production still haven’t recovered to pre-COVID levels, and what was once a substantial hardwood export market to China has been devastated by trade disputes dating back several years. Mills are responding by chasing new export markets, investing in remanufacturing, and trimming payrolls where needed.

The net effect for regional contractors: material costs remain elevated and somewhat unpredictable, even as the domestic mills that might otherwise offer a buffer are themselves under financial pressure.

Sources:

• Tax Credit Advisor, “2026 U.S. Construction Costs — Q2 Update” — https://www.taxcreditadvisor.com/articles/2026-us-construction-cost-outlook-q2-update/
• Builders Supply & Home Center, “Lumber Prices in August 2026” — https://bldrsupply.com/lumber-prices-in-august-2026-what-eastern-washington-builders-should-know/
• Hoodline, “Washington Timber Industry Facing Cutbacks As Rules And Tariffs Bite” — https://hoodline.com/2026/04/tariffs-and-tree-rules-squeeze-washington-mill-towns/