Currently the data center and data center construction industry are keeping an eye on the developing situation of tariffs, as short term and long term effects remain to be seen. On April 11, 2025 U.S. Customs and Border Protection announced a 90-day temporary exemption from certain tariffs for a range of electronics, including computers, laptops, disc drives, automatic data processing equipment, semiconductor devices, memory chips, and flat panel displays—even those imported from China.​ These products were excluded from U.S. “reciprocal tariffs,” which had imposed steep duties—up to 125%—on Chinese imports. However, the 90-day pause will expire on July 9, 2025. 

This is good news in part for companies providing the intelligence contained within data centers, however could prove to be challenging for contractors and subcontractors building and securing the builds of these physical data centers. On March 12th, 2025 tariffs on all steel and aluminum coming into the U.S. were raised to 25% which will likely impact data center construction and planning moving forward, as they are not part of the 90-day pause.

This is not to predict doom and gloom, but companies will need to be more innovative than ever, and seek solutions and partnerships now, to navigate these new challenges moving forward.  

How will Data Centers Builds Be Impacted?

The data center industry has been thriving amid a construction boom, but once the 90-day pause expires, the threat of looming higher prices on goods and materials could have a lasting effect for companies sourcing their materials from overseas. The tariffs threaten to disrupt global supply chains for multinational corporations, or companies based in the U.S. who get their materials from other countries. To navigate these disruptions, developers may need to think outside the box, and explore alternative materials and design approaches, all while maintaining a strong focus on sustainability for the long run.

Not only could U.S. tariffs significantly increase the cost of key materials such as steel, lumber, and those used in HVAC systems, but this in turn could disrupt project timelines and put added strain on construction budgets. 

As companies potentially look to keep more manufacturing in the U.S. (especially if their employees or subcontractors were once based overseas) rising labor costs may be passed on to the consumer from these particular companies. It will also be important to watch across the board all vendors, even domestic, if there is a need or desire to raise prices.

A potential innovation slowdown is also another possibility. Tighter margins and higher costs could limit the next generation of AI and research and development. It is possible data center builds could lean toward more densely targeted projects, with data centers taking up less of a physical footprint. We have seen data center plans being built more vertically now, taking up less land (think Tokyo) to accommodate more intel. Also with the rise of AI, smaller spaces may be able to accommodate more information than previously needed. So this potential trend towards smaller spaces, may continue as a way to offset tariff concerns.

Another speculation is that tariff uncertainty may delay next-gen chip releases, so then large scale cloud providers (Amazon, Google, Microsoft, IBM etc) may delay AI-optimized data center wings, halting part of their growth pipeline.

Seeking Out Solutions

One fairly straightforward seeming solution would be to work with U.S. contractors and subcontractors exclusively, who source their manufacturing and hardware domestically, thus avoiding tariffs altogether. Taking a closer look, this is not always easy as many have moving parts where certain materials are sourced internationally and brought back to the U.S. to integrate into and complete the final builds in the U.S. Therefore it is important to really invest in thorough due diligence before beginning a construction project so you know what you’re in for. Investigate subcontractors, vendors, pick up the phone and have conversations, go over projected invoices with a fine-toothed comb, and select companies your organization implicitly trusts and with an honest track record. 

According to discussions at Data Center Dynamics Connect held in NYC on March 24-25, 2025, Founder/CFO of Critical Site Construction, Bethany Careri, states “ many discussions of the impact of tariffs took place during the iMasons Women’s conference warning that tariffs may become the next major excuse for inflated prices – similar to how Covid-19 was used.”  Always ask for proof that a company’s costs have actually increased, because in many cases, they haven’t and the business may simply be taking advantage by price gouging. 

Related to hiring, and to express it simply – it is not always better to hire bigger but rather hire smarter. When seeking talent and professionals for your data center build, smaller specialized niche firms where this work is their core focus, and experienced professionals are on staff, are more likely to deliver on price and expertise. 

Another factor to consider is sustainability. It is important to look for an organization that uses high-quality durable materials, and work with experts who understand sustainable design. In the long run this will ensure your ROI, avoid repairs or rebuilds which companies may not be willing to commit to with the uncertainty of looming tariffs. So “do it once, and do it right” as the saying goes. And also important to note benefits of creating sustainable builds: energy efficiency which equals lower operating costs, reduces emissions and meet climate goals, tax breaks, LEED or Energy Star certifications, and corporate investors have just come to expect sustainable data centers.

Other potential solutions include pre-purchasing and stockpiling critical components. If dealing with an international company or companies sourcing internationally, it may be beneficial to lock in pre-tariff pricing by bulk purchasing before tariffs increase (although some such as on aluminum and steel have already increased, in which case it may be best to pivot to U.S. companies). This strategy works best if projects are phased or long-term.

And finally, design for modularity and flexibility. Use a modular data center design that allows for expansion using available materials. Standardize walls, panels, equipment racks or shells so you can substitute parts more easily based on sourcing availability. By hiring a subcontractor who sources their components in the U.S. and can complete a modular build on location, adding and subtracting as needed (think interchangeable lego pieces) this added flexibility can allow creative solutions to data center construction projects, even in the age of tariff uncertainty.

A Trusted Subcontractor: Critical Site Construction

As we measure impacts and predict future growth in the data center construction industry, it will be more important than ever to work with a company you trust, that has established relationships, but is also flexible at navigating solutions, and has U.S. based manufacturing connections.

At Critical Site Construction (CSC), we are what our name says. With over 20 years of experience, we’ve worked on critical, high-level projects, specializing in sensitive data center construction. This includes secure data server cage installations, hot & cold aisle containment, site preparation, structural development, and integration of mechanical, electrical, and plumbing (MEP) systems. Another area of expertise includes SCIF facilities, adhering to the highest level of government and military specifications. Projects for clients include Amazon, Meta, NASA, Department of Defense, Verizon, Microsoft, Samsung, Sony, Johns Hopkins University, the NFL and more. Another focus of CSC includes infrastructure upgrade services to enhance existing data center facilities, improving power distribution, cooling systems, and physical security to meet evolving technological demands.

Critical Site Construction, headquartered in New Jersey, works with U.S. based manufacturing plants (like current partner iFortress) and sources its materials domestically from within the United States for both modular and traditional builds. According to Critical Site/iFortress so far they have not had any sourcing issues or job delays due to the fact that steel and raw materials are USA sourced. Although keeping close watch on the emerging tariff developments, CSC will most likely not feel the effect of tariffs as much as competitors who source internationally, thus keeping costs stable. 

Also notable, Critical Site Construction employees and labor force employees have extensive experience within data center construction specifically. They are highly trained in logistical and technical matters from conceptualization, to working hand-in-hand to meet client goals, to execution. All employees are also U.S. citizens, and regularly clear background checks performed at the highest levels of scrutiny. And if work is done overseas, as many of Critical Site Construction projects are, TAA trade Agreement Act compliant materials are used.

While the future of tariffs remains uncertain, the Critical Site Construction workforce continues to be a reliable and trusted partner. As you navigate the uncertainty of tariffs during this ever changing time, you can count on CSC for your data center build. With their expertise, skilled labor force, ability to navigate complex challenges, U.S. homebase coupled with international experience, and proven financial accountability, we are ready to assist with your next data center construction project.