Global trade policy has once again taken centre stage, with the reintroduction of protectionist tariffs—particularly by the U.S.—raising fresh questions for UK property developers. While imports to the UK are not directly subject to these tariffs, the broader economic consequences, especially when combined with uncertainty around future policy shifts, could have significant ripple effects across the development landscape.

Tariff Volatility

One of the key concerns for developers is the unpredictability of international trade policies. U.S. tariffs on imports—such as the duty on Chinese goods and a 10% levy on other imports—have been subject to abrupt changes and reversals, depending on shifting political priorities. This volatility makes it difficult for developers, contractors, and suppliers to plan with confidence, particularly when material sourcing and pricing are tied to global supply chains.

Broader Economic Impacts on the UK Property Market

Forecasts from the National Institute of Economic and Social Research (NIESR) indicate that the imposition of such tariffs could reduce UK GDP growth by up to 0.7 percentage points in the first year, with a lingering drag into the second year. This could result in a global economic slowdown resulting in the Bank of England lowering base rates to encourage activity. Lower base rates will likely lead to an improvement in buyer affordability. This will be welcome news for residential developers who have been navigating high base rates over the last couple of years. Further, deal viability may be boosted as finance markets become more accommodating.

Construction Costs and Supply Chain Exposure

Tariffs on key materials, especially steel and aluminium, may lead to price spikes and disruptions. The UK construction industry, already grappling with tight margins and labour constraints, could be further strained by inconsistent supply chain performance and fluctuating input costs. The erratic nature of these tariffs—both in scale and in their target countries—adds a layer of complexity to procurement and project planning.

Finding Opportunities Amid the Uncertainty

While challenges persist, the shifting global trade environment also presents opportunities. Developers who can remain agile—by diversifying suppliers, locking in long-term pricing where possible, and adapting to new sourcing routes—may find cost advantages. Moreover, if the UK is seen as a relatively stable location amidst broader global turbulence, it could attract new inward investment into real estate and infrastructure.

Conclusion

Although UK developers are not on the front line of global trade wars, the secondary impacts are very real—and increasingly difficult to predict. The volatile nature of current tariff policy means that property professionals must stay vigilant, adaptive, and legally well-advised to keep developments on track in an unpredictable economic climate.

For further information, or to discuss the issues raised within this case, please contact us to speak to a member of our Real Estate Team.