The Trade Brief - 22 August 2026

Today's edition covers the Canada 50% tariff that took effect this morning on a broad range of building materials, lumber prices sliding to a fresh low on weak housing demand, a $264 million Navy construction award in South Carolina, the extraordinary pace of U.S. data center construction starts, and a sharp rebound in UK contract awards driven by the New Hospital Programme.

Canada's 50% tariff on building materials is now in effect across the U.S., covering cement, plywood, paint, and fiber cable among other inputs. The duties, which took effect 22 August 2026, apply to a specific list of Canadian goods including cement, paint, plywood, and fiber cable^[1], adding directly to the cost base of contractors who have not yet locked in supply agreements or secured exemptions. Procurement teams should audit Canadian-sourced line items immediately; the tariff applies at the border and cannot be reclaimed after the fact.

Lumber prices fell below $580 per thousand board feet this week as tariff uncertainty and a weakening housing market combined to suppress demand. U.S. housing starts fell 12.4% in July, with single-family construction dropping to its lowest level since late 2022, pulling lumber-intensive residential work down with it. Construction spending on lumber-intensive single-family housing fell 3.3% year-on-year in June, and Canada's negotiators remain at odds with Washington over softwood lumber terms, with Ottawa continuing to push for zero tariffs. The near-term read for framers and lumber buyers: supply is available but the demand signal is weak, and any trade resolution could move prices quickly in either direction.

HITT Contracting has been awarded a $264 million Navy construction contract to expand the P200 nuclear power training simulator facility at Joint Base Charleston, South Carolina. The fixed-price award-fee contract, announced 20 August 2026, carries a base value of $264,031,732 and includes 12 unexercised options that could raise the cumulative value to $274.3 million. Work is expected to be completed by April 2030, with the first fiscal 2026 MILCON obligation set at $55.1 million. The project expands the facility that trains roughly half of all U.S. Navy nuclear reactor operators; construction is expected to begin in Q4 2026. For specialty subcontractors in the Carolinas, this is a multi-year pipeline with significant electrical, mechanical, and simulation-systems scope.

U.S. data center construction starts totalled $22.3 billion in June 2026, the second-highest monthly figure on record, and year-to-date spending has already surpassed the full-year 2025 total. Year-to-date starts through June reached $81.5 billion, exceeding 2025's full-year total of $72.5 billion and running more than three times the 2024 full-year figure. The year-to-date 2026 median construction cost for data centers stands at $570 per square foot, with the average at $859. Data centers now account for roughly 80% of the U.S. Offices construction category, according to ConstructConnect's August brief, meaning the sector is effectively driving the entire nonresidential building market. Contractors without data center experience or relationships are increasingly locked out of the largest nonresidential opportunities.

UK construction contract awards surged 169% year-on-year in the three months to the end of July 2026, with the New Hospital Programme accounting for much of the jump. Glenigan's August Construction Review found £33.1 billion worth of projects were awarded in the period, with major contract awards - those worth at least £100 million - rising 434% against the same period in 2025. Eleven hospital contracts were awarded in the quarter, with healthcare awards rocketing more than 600% and education-sector signings trebling. Civil engineering also performed strongly, with project starts up 171% year-on-year and main contract awards up 85%, led by roads and ports work in the South East. The caveat: detailed planning approvals fell 37% against 2025 levels, suggesting the pipeline behind the current awards wave is thinner than the headline numbers imply.