Trade policy has long shaped global markets, but its latest wave of tariffs is now hitting property development head-on.
Sweeping duties on key construction materials — including steel, aluminum, timber, and cement — are driving up costs, delaying projects, and straining global supply chains. Though framed as tools to protect domestic industries, these tariffs are acting as hidden taxes on developers and homebuyers.
Across Asia and the Middle East, escalating trade tensions are putting serious pressure on the construction sector. In China, tariffs of up to 25% on steel and aluminum exports to the United States, reinforced by stricter origin rules, have effectively severed a crucial trade corridor.
Manufacturers are now pushing extra supply into nearby markets, causing price volatility and making it harder for builders to plan.
Southeast Asian countries now dealing with redirected supply are facing growing pressure on their construction sectors. Vietnam, Malaysia and Indonesia are exposed to supply chain disruptions and material cost fluctuations.
In Vietnam, where industrial construction has accelerated, developers are pausing projects amid weaker forecasts and an increasingly unpredictable policy environment. The region’s position in global supply chains is under strain.
For developers, these conditions are unsustainable. Sudden tariff shifts make sourcing materials far more unpredictable and risky. Without pricing predictability, long-term projects stall. Investment appetite is cooling as developers scramble to contain spiraling material costs and reassess project feasibility.
In the Gulf, rising costs are rippling through some of the biggest construction projects on the planet. Saudi Arabia and the UAE, leading projects worth hundreds of billions, are now facing moderate rises in material costs.
Aluminum prices have been broadly stable in global markets this year, while cement prices have risen by approximately 2% since January. Even modest increases are squeezing timelines and inflating budgets at a time when delivery expectations are surging.
Gulf developers are responding strategically. Many are restructuring contracts, tapping alternative suppliers, or accelerating modular builds. These efforts show how developers are adapting, yet also highlight the strain caused by unpredictable trade policy on industries that rely on stability.
What’s lacking is predictability. Broad and unpredictable trade policy makes it harder to plan and invest. Construction relies on steady conditions, not speculation. Governments in the region should focus on consistent trade rules, stronger local supply and smarter infrastructure planning.
Tariffs aren’t just technical decisions buried in trade policy—they directly shape how construction projects are financed, staffed and delivered. A single high-rise delayed by cost spikes can throw off budgets, timelines, and housing targets. Multiply that across markets, and it slows economic progress.
Housing supply is being squeezed. As costs rise, developers lean into premium builds, sidelining affordable projects. Across Asia and the Middle East, this shift is intensifying shortages and deepening inequality in housing access. What begins as a trade measure ends as a constraint on livability.
The rationale behind tariffs — whether to protect domestic industries, counter foreign trade practices, or achieve political leverage — may make certain sense in theory. However, when applied to fundamental building materials, they create economic distortions that spill into property markets.
Asia and the Middle East can shape a more stable path forward. The region’s scale, ambition and capital give it leverage to push for trade frameworks that support development. The stakes reach every household, every neighborhood, every city striving to expand sustainably.
If tariffs continue unchecked, homes and infrastructure could become collateral damage in trade wars — a scenario that neither policymakers nor the property industry can afford. It is time for a recalibration before these costs become permanently embedded in the market.
Mohamed Mussa is executive director of Chestertons Global, a London-based global real estate consultant.
