New 50% Tariffs Hit Cement, Plywood & Paint August 19
New 50% Tariffs Hit Cement, Plywood and Paint on August 19
Contractors have less than two weeks to reprice anything sourced from Canada. A presidential proclamation signed July 20 imposes an additional 50 percent ad valorem duty on certain Canadian products, effective 12:01 a.m. Eastern on August 19, 2026. The action was taken under Section 338 of the Tariff Act of 1930 — a rarely used authority — in response to Canada’s motor vehicle tariff regime.
The construction relevance is in the annex, not the headline. The covered goods include cement, paint, plywood, and fiber cable. Those are line items on nearly every commercial and residential project in the country, and the duty applies to goods entered for consumption on or after the effective date. Material sitting on a truck at the border on August 18 lands in a different cost world than the same material on August 20.
The Tariff Stack Contractors Are Already Carrying
The Canada action lands on top of an already dense structure. Steel, aluminum, and copper items made entirely or mostly from those metals carry 50 percent duties. Derivatives made substantially of those metals carry 25 percent. Industrial and electrical grid equipment containing them carries 15 percent, as do HVAC systems and components. Softwood lumber and timber sit at 10 percent, with various derivatives at 25 percent.
Then came July 24, when additional Forced Labor Section 301 tariffs of 10 to 12.5 percent took effect across the top 60 U.S. trading partners — covering 99.4 percent of U.S. imports. AGC maintains a running tally of what applies to construction materials in its Tariff Resource Center for Contractors, last updated July 24.
Not all of it moves in one direction. The Supreme Court’s decision on IEEPA tariffs removed the reciprocal tariff structure and several country-specific rates, and AGC has published guidance on the refund process for duties already paid. Firms that absorbed those costs on completed work may have money to recover.
Domestic Suppliers Aren’t the Escape Hatch
The instinct to specify domestic product is reasonable and often insufficient. Producer price indexes measure what U.S. sellers charge, and those indexes have surged anyway — aluminum mill shapes up 52.4 percent year over year through June, copper and brass up 26.0 percent, steel mill products up 16.9 percent. When imported competition gets taxed, domestic capacity gets bid up. AGC’s own guidance flags this directly: tariffs shift demand toward domestic equivalents and move those prices too.
Contract Language Is the Only Real Defense
Once a fixed-price contract is signed, a tariff increase is the contractor’s problem. AGC’s consistent message to members has been to revise contract language before the next project is signed, not after the dispute is underway, and it points members toward the ConsensusDocs 200.1 Material Price Escalation Amendment as a starting point.
Practical steps that cost nothing to implement: shorten supplier quote validity to 15 or 30 days, add a tariff-specific escalation clause rather than a generic price-escalation clause, document the tariff basis for every change order contemporaneously, and require subcontractors to disclose country of origin at buyout. Firms that got burned in 2021 already know this drill. Firms that came up since then are learning it in real time.
The cost pressure is not evenly spread across the industry, either — the widening gap between input costs and bid prices is hitting some segments far harder than others, and contractors without data center work are feeling it most.
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Frequently Asked Questions
Which construction materials face new tariffs on August 19, 2026?
The July 20 proclamation applies an additional 50 percent duty to certain Canadian goods listed in its annex, including cement, paint, plywood, and fiber cable. The duty applies to goods entered for consumption on or after 12:01 a.m. Eastern that day.
What are the current tariff rates on steel, aluminum, and copper?
Items made entirely or mostly from those metals carry 50 percent duties. Derivatives made substantially of them carry 25 percent. Industrial and electrical grid equipment containing them carries 15 percent, as do HVAC systems and components.
Are lumber and timber subject to tariffs?
Yes. Softwood lumber and timber carry a 10 percent tariff, and various lumber and timber derivative products carry 25 percent, according to AGC’s tariff tracking.
Does buying American-made material avoid tariff-driven cost increases?
Not reliably. Producer price indexes reflect what domestic sellers charge, and they have risen sharply anyway — aluminum mill shapes 52.4 percent and steel mill products 16.9 percent year over year. Tariffs shift demand onto domestic capacity, which pushes those prices up.
Can a contractor recover tariff costs on a signed fixed-price contract?
Generally not without contract language allowing it. That is why AGC advises revising terms before signing rather than after costs move, and points members to the ConsensusDocs 200.1 Material Price Escalation Amendment.
Have any construction-related tariffs been removed?
Yes. Following the Supreme Court’s decision on IEEPA tariffs, the reciprocal tariff structure and several country-specific rates are no longer in effect. AGC has published guidance on the refund process for duties already paid.
What contract language actually protects against tariff increases?
A tariff-specific escalation clause works better than a generic price-escalation clause. Pair it with shortened supplier quote validity, contemporaneous documentation of the tariff basis for change orders, and country-of-origin disclosure from subcontractors at buyout.
Works Cited
“Imposing Additional Duties to Offset Canadian Discrimination Against the Commerce of the United States with Respect to Motor Vehicles.” The White House, 20 July 2026, www.whitehouse.gov/presidential-actions/2026/07/imposing-additional-duties-to-offset-canadian-discrimination-against-the-commerce-of-the-united-states-with-respect-to-motor-vehicles/. Accessed 6 Aug. 2026.
“Tariff Resource Center for Contractors.” Associated General Contractors of America, updated 24 July 2026, www.agc.org/tariff-resources-contractors. Accessed 6 Aug. 2026.