Construction bulletin: Focus on tariffs under construction contracts

Welcome to the July 2025 Construction Bulletin in which our team looks at the issue of tariffs and their impact on costs under construction contracts in the UAE, KSA, Oman, Denmark, UK, Australia, Qatar, Sweden, and South Africa.

In 2025, the global construction materials market is expected to reach USD1.3 trillion¹. China is the largest exporter of construction materials such as steel, bricks, plastic and mineral building materials. The United States, EU, Germany and Japan are also major exporters. The demand for imported construction materials in hotspots such as the Middle East, Africa and Southeast Asia is strong and predicted to grow as increased urbanisation and industrial development transform growing nations in these regions.  

In early April 2025, the United States announced wide-ranging “reciprocal tariffs” on imports into the United States. After a series of pauses and adjustments, the tariffs are scheduled to take effect on 8 July 2025. Many nations affected by the US tariffs imposed or intend to impose retaliatory tariffs. When news of the impending tariffs broke, construction sector participants went scrambling for their contracts to assess their exposure to additional direct and indirect costs imposed by the tariffs. Many have been surprised by what they found and did not find.

The DLA Piper construction team reviews some key jurisdictions (the UAE, KSA, Oman, Denmark, UK, Australia, Qatar, Sweden, and South Africa) and what their standard form contracts contemplate in allocating the costs risk imposed by tariffs. Although some jurisdictions’ standard form contracts specifically allocate the costs risks of taxes and duties, some standard forms do not. Where contracts do not expressly address this risk, parties will need to look to change in law clauses for any available relief or rely upon specific governmental intervention. For upcoming projects, the team is seeing a renewed focus on the “taxes and duties” and “change in law” regimes to cater for the increased likelihood that tariffs will impact their project in the future.

For an up-to-date snapshot of the status of US tariffs see: Tracking Trump tariffs | DLA Piper.

¹Construction Materials Market Size, Share & Analysis 2033 Report