A foreign construction equipment maker is betting big on President Donald Trump’s trade policies even as developers cancel billions in clean energy and tech manufacturing projects.
JCB, the U.K.-based construction equipment company, plans to double the size of its San Antonio, Texas, factory to 1 million square feet, said Anthony Bamford, JCB chairman, in a news release. The company cited the Trump administration’s tariffs as a key reason to localize more production.
Novartis, a Swiss drugmaker, also plans to substantially expand its U.S. footprint, including in Florida, Texas, New Jersey and California. The company recently committed $23 billion over five years to build six new factories, expand three existing ones and add a new research and development hub.
But these projects serve as the exception, rather than the rule, of developers’ reaction to tariffs that have been announced, increased and paused — sometimes simultaneously — on Trump’s watch.
These expansion announcements are likely “to be outweighed by the value of projects that are cancelled,” said Ken Simonson, chief economist at the Associated General Contractors of America.
Indeed, project stress picked back up in March, particularly for private projects, according to the latest data from Cincinnati-based ConstructConnect. The report revealed developers scrapped nearly twice as many private projects as public ones last month, according to the report.
So, while some firms are building in response to tariffs, most in the construction industry are pulling back.
EV megaprojects slowdown
Take, for example, electric vehicle facilities. Just over a year ago, contractors expressed bullishness in the electric vehicle manufacturing boom.
Electrical machinery construction, which includes EV battery facilities, accounted for nearly half of all manufacturing construction in 2023, according to Dodge Construction Network.
But momentum around these projects is beginning to shift, according to recent project abandonments. U.S.-based EV and battery manufacturers canceled more projects in the first quarter of 2025 than in the previous two years combined, according to data from Atlas Public Policy, a Washington, D.C.-based business consultant.
Although specific drivers vary, the common thread behind many of the cancellations is growing uncertainty, said Sophie Latham, policy associate at Atlas Public Policy. Shifting tariff policies, federal tax credit changes and murky timelines around Department of Energy funding have made project financing more difficult, she said.
“The state of manufacturing will depend a lot on how tariffs and tax credits shake out this year,” said Latham. “In some cases, these tax credits are the difference between a company investing in the U.S. and abroad, so changes to them could motivate more cancellations."
Nearly half of the $30 billion in clean tech factories scheduled to come online in 2025 are now predicted to face delays or cancellations, according to a report from BloombergNEF, a research group focused on clean energy financing.
Major project cancellations
Battery maker KORE Power, a Coeur d’Alene, Idaho-based supplier of battery cell tech, halted construction earlier this year on its $1.25 billion lithium-ion battery plant in Buckeye, Arizona. The company, which previously received conditional approval for an $850 million federal loan, opted to retrofit an existing plant instead.
Chip manufacturer Intel also delayed construction of its Ohio One semiconductor plant, largely due to rising construction costs and weaker-than-expected chip demand. Microsoft, likewise, recently axed several data center projects in the U.S., citing a slowdown in regional demand for cloud services.
The tech giant paused three Ohio data center developments, including a $1 billion project outside Columbus, and has also delayed builds in Illinois, North Dakota and Wisconsin, according to Bloomberg.
Moving forward
As tariff volatility deepens, contractors face difficult decisions about how to adapt procurement strategies without overcommitting to a policy environment that might change within months, said Julian Beach, special counsel at Pillsbury, a New York City-based law firm.
Legal experts urge construction firms to stay flexible. The newly imposed reciprocal tariffs, layered on top of existing 232 duties for materials like steel and aluminum, have created a tangled set of trade rules that impact construction inputs across the board.
“We have a very complex set of different and overlapping tariff regimes,” said Stephan Becker, partner at Pillsbury, during an April 10 webinar on tariff impacts. “Now, when U.S. importers are evaluating what’s going to happen to their products into their supply chains, they have to examine every one of these different regimes and figure out, ‘Am I subject to reciprocal tariffs, is my product already subject to a section 232 tariff, am I entitled to one of the current exemptions?’”
Those exemptions, however, are limited.
Though some materials with at least 20% U.S. content may qualify for reduced tariffs, and exclusions exist for certain goods including copper, most contractors will need to evaluate their exposure on a project-by-project basis, said Sahar Hafeez, senior counsel at Pillsbury.
Customs rules also prevent firms from sidestepping tariffs by routing materials through other countries without meaningful processing, said Becker.
“If you have a product from China and you send it to Vietnam and then send it to the United States and say it’s a Vietnamese product, that’s customs fraud,” said Becker. “The origin of a product in general is determined by applying a long standing test under the customs law called substantial transformation, which in many cases is a very fact specific, case-by-case evaluation.”
Contractors hoping to buy time or delay tariff impacts may also want to explore avenues such as customs bonded warehouses or foreign trade zones, said Becker. These programs allow firms to store imported goods without paying duties unless or until the materials are withdrawn for use in the U.S.
That level of strategic planning will become increasingly important, as federal trade and tax policies remain in flux, said Latham.
“Tariffs are obviously significant,” said Latham. “But of course that landscape is changing every day.”
It’s that shifting landscape that helped sink International Recycling Group’s $300 million recycling plant in Pennsylvania, among the other projects detailed here. The company cited Trump’s tariffs and the Department of Energy’s decision to not issue a $182 million loan as significant reasons for pulling the plug.
“I am personally devastated after 18 years of working to bring this vision to a reality that we have failed to overcome these challenges,” said IRG’s Co-founder and CEO Mitch Hecht, according to Utility Dive.
