NECA Sends Alert on Tariffs and the Electrical Construction Industry

On February 5th, The National Electrical Contractors Association (NECA) sent an alert to members about the impending tariffs proposed by President Trump. 

For more details on the tariffs and how they will impact the construction industry, read "New Tariffs Trigger Construction Industry Concern" by Tom Zind.

In their alert, NECA said "The electrical construction industry may face considerable risks due to these tariffs. The most immediate effects may include:

• Increased Material Costs – Essential imports such as copper wiring, electrical panels, and
  transformers will now be subject to significant cost increases.
• Supply Chain Disruptions – Delays in material procurement could impact project timelines,
  particularly for contractors working on large-scale infrastructure projects.
• Contractual Challenges – Employers with fixed-price contracts may face significant financial strain
  if existing agreements do now allow for adjustments due to increased tariffs.
• Shift to Domestic Suppliers – Some employers may seek U.S. based manufacturers to mitigate
  tariff exposure, though domestic suppliers may not be able to meet increased demand, further
  inflating prices."

NECA went on to tell its members, "Employers and industry stakeholders should adopt a proactive approach to mitigate risks associated with these trade policies. Recommended strategies include:

• Diversified Sourcing – Exploring alternative suppliers, including domestic manufacturers or other
  countries’ imports, can help offset price increases.
• Contractual Adjustments – Proactively negotiating cost escalation clauses in new contracts and
  reviewing existing agreements for provisions like “force majeure” or “change-in-law” to address
  tariff-related risks.
• Strategic Inventory Management – Utilizing creative strategic inventory management and
  coordinating with existing third-party vendors may prevent shortages in materials.
• Policy Advocacy – Engaging with policymakers may help to influence future trade negotiations
  and provide long term economic relief for affected businesses.
• Legal and Financial Consultation – Consult with legal and financial experts to evaluate contracts,
  ensure compliance, and manage risks effectively."

Read the full alert from NECA here.