How Trump’s Tariffs Could Disrupt the CRE Industry 

President Donald Trump’s tariffs have received a lot of news coverage, but what do they mean for the CRE industry?  

Tariffs could impact construction costs, tenant needs, and long-term planning. 

What You Need to Know 

President Trump is again pushing for aggressive tariffs, and current law gives him the power to act without Congress. 

Although the Constitution gives Congress the power to set tariffs, laws passed over the years have shifted much of that power to the president. 

These laws let the president set tariffs for national security or economic emergency reasons. 

Congress is debating the Trade Review Act of 2025, which would require a vote on new tariffs within 60 days, but it’s unlikely to pass. 

If it passes, President Trump is expected to veto it, and Congress likely won’t have the votes to override him. 

Governor Gavin Newsom is worried that tariffs could hurt key California industries and wants our trading partners to believe that California remains a stable trading partner.  

In line with this, the state will work to protect California-made goods from these tariffs with a plan available in the weeks to come.  

How It Impacts You 

If Trump’s tariffs are implemented, these are the challenges the CRE industry could face: 

Higher Construction and Maintenance Costs: Tariffs on steel, aluminum, HVAC systems, and other materials could increase costs for tenant & capital improvements and maintenance. 

Delays in Building Improvements: Trade restrictions could disrupt supplies, slowing renovations, frustrating tenants, and complicating lease talks. 

Budget Pressures: Rising costs could strain budgets, especially for buildings with fixed CAM caps. Managers may need to renegotiate contracts or delay upgrades. 

Tenant Instability: Tenants in manufacturing or logistics may struggle with tariffs or supply chain issues, affecting lease renewals or rent payments. 

Policy Uncertainty: Uncertainty about how long tariffs will last or if Congress or courts will intervene adds risk to long-term planning. 

Stay Connected 

Legal challenges to the tariffs are underway, but court rulings could take months or years. 

In the meantime, unless Congress acts, lawsuits succeed, or California can provide some sort of protection, property managers should brace for volatility. 

Stay connected to BOMA on the Frontline for updates on policies impacting you, like these tariffs.