How Do New Tariffs Affect Electrical Contractors? 2025 News

Key Takeaways

• Update your bidding and contract practices immediately to reflect current market conditions.
• Build stronger relationships with suppliers and explore alternative sourcing options where possible.
• Stay informed about policy changes by subscribing to industry updates from NECA or other trade organizations.

The 2025 tariffs on materials like copper, steel, and aluminum are reshaping the way electrical contractors operate. With costs rising and supply chains tightening, contractors may see more obstacles in keeping projects on track. According to David Long, CEO of the National Electrical Contractors Association (NECA), “The electrical construction industry may face considerable risks due to these tariffs. Employers and industry stakeholders should adopt a proactive approach to mitigate risks associated with these trade policies.”

This guide breaks down exactly how these tariffs affect your day-to-day operations and provides specific steps you can take now to protect your electrical business.

What Are the New Tariffs?

Several new tariff measures are taking effect:

• 25% tariffs on imported steel and aluminum from Canada, Mexico, and the EU began in March 2025.
• Copper imports face a potential 25% tariff following an investigation into national security risks related to foreign copper dependency.
• Electrical equipment like transformers and panels is seeing price increases due to higher duties on raw materials like steel and copper.

These policies aim to encourage domestic manufacturing but have created considerable hurdles for industries reliant on imported materials.

How Do These Tariffs Affect Electrical Contractors?

Higher Material Costs

The cost of key materials has increased sharply:

• Copper wiring prices have risen by 18% since January 2025.
• Steel conduit costs are up 14%, affecting structural components.
• Electrical panels now cost 22% more on average due to combined steel and copper tariffs.

For example, a mid-sized commercial project requiring extensive copper wiring could see material costs jump by tens of thousands of dollars.

Supply Chain Disruptions

Contractors are also experiencing delays in acquiring materials:

• Lead times for switchgear have doubled from 12 weeks to over 26 weeks.
• Many contractors are stockpiling materials, with some holding up to six months of inventory to avoid shortages.

Because of these problems, companies have to rethink how they buy things and change project timelines.

Contractual Challenges

Fixed-price contracts signed before these tariffs took effect are becoming problematic:

• Nearly 70% of contractors report reduced profit margins due to unexpected material cost increases.
• Force majeure provisions are being invoked more frequently as businesses struggle to manage unforeseen expenses under new tariff conditions.

Practical Strategies for Contractors

Adjust Your Bidding Process

To account for fluctuating material costs, include clauses in new bids that allow for price adjustments based on tariff impacts. For example, escalation clauses tied to specific material price indices can help protect your margins.

Strengthen Supplier Relationships

Work closely with suppliers to secure better terms:

• Negotiate bulk pricing agreements for high-demand materials like copper and steel.
• Partner with regional distributors who can provide faster access to inventory.

Audit Existing Contracts

Review current agreements to identify risks related to tariff-driven cost increases. If possible, renegotiate terms or document cost impacts thoroughly to support change order requests.

Explore Domestic Sourcing Options

While domestic suppliers can help avoid tariffs, they come with limitations:

What’s Next for the Industry?

The ripple effects of these tariffs will continue throughout 2025:

• Material costs are expected to rise by another 8–12% by Q2.
• Projects dependent on copper, such as renewable energy installations, remain particularly vulnerable due to limited alternatives.
• Retaliatory tariffs from Canada and Mexico could further increase costs for cross-border projects.

While these tariffs present genuine challenges for electrical contractors, companies that respond strategically can minimize their impact. By revising contract language, strengthening supplier relationships, and staying informed about policy developments, you can better navigate these changing market conditions.

The most successful contractors in 2025 will be those who anticipate material cost fluctuations and build flexibility into their project planning. Start implementing these strategies today to maintain your competitive edge despite tariff pressures.