As global trade policies continue to evolve, tariffs have become a pivotal force influencing project costs, timelines, and financial risk – especially in sectors like construction and manufacturing. For contractors, developers, and project owners alike, the ripple effects of tariffs can introduce unexpected volatility. And when project solvency is on the line, that volatility becomes a real concern for the surety industry.
At Metayer Bonding Associates, we closely monitor these economic variables to help our clients stay ahead. With 3 decades of exclusive focus on surety bonds and a nationwide portfolio that includes top construction firms, government contractors, and ENR 400 companies, our team brings deep insight and foresight to every bond we place.
Here’s how tariffs may impact the surety industry – and how Metayer Bonding Associates helps clients navigate this changing landscape with confidence:
Increased Material Costs Means Increased Bond Risk
Tariffs on imported construction materials – steel, aluminum, lumber, and mechanical components – can drive up project costs significantly. These increases can stretch contractor budgets beyond their limits, potentially compromising their ability to fulfill contractual obligations. Surety bond claims often rise in these conditions, particularly when margins are tight. Metayer Bonding Associates proactively assesses financial capacity and helps clients by modifying their bond programs to meet larger needs due to price increases.
“There are many difficult aspects about doing construction in NYC. Metayer Bonding Associates well understands this and is very adept at making certain that all of our bonding needs are handled in a prompt, professional fashion. ” – Steve Mount, CFO at J.T. Magen & Company INC, ENR Top 400 Contractor
Project Delays and Liquidated Damages
Escalating material costs and sourcing challenges can also delay procurement and timelines, creating a domino effect that impacts project completion dates. Delays can trigger liquidated damages clauses and invoke performance bond claims. Our experienced advisors work with both contractors and project owners to mitigate these risks before they result in costly disputes.
Heightened Underwriting Scrutiny
As tariffs introduce uncertainty into contractors’ balance sheets, sureties must reassess risk profiles and financial strength with a sharper lens. At Metayer Bonding Associates, we work collaboratively with our clients to position them strongly during underwriting, ensuring their financials reflect both resilience and adaptability in the face of economic pressure.
“After almost 15 years, we have a great deal of trust in Metayer Bonding Associates and with them as a partner, we know we are in the best hands.” – John Lapinski Controller at The Dennis Group, ENR Top 400 Contractor
Changing Market Competition
Tariff-driven cost disparities can shift market dynamics. Some contractors may choose to absorb rising costs to remain competitive, while others pass them on. These strategic decisions can affect bidding behavior and the profitability of awarded contracts – both of which influence bond viability. Our team helps clients evaluate the downstream bonding implications of these market shifts.
Macroeconomic Ripple Effects
Prolonged or unexpected tariff actions can cool broader economic activity. In times of slowed growth or recession, defaults and surety claims typically rise. That’s why Metayer Bonding Associates takes a long-view approach – helping clients not only secure bonds today, but build bonding capacity and financial strategies that are sustainable through economic cycles.
Your Strategic Advantage in Uncertain Times
Navigating an environment of rising tariffs and unpredictable trade policies requires more than just bond placement – it requires insight, foresight, and a strategic partner you can trust. Metayer Bonding Associates brings decades of experience, industry specialization, and a reputation for solving the most complex bonding challenges.
Whether you’re a midsize contractor or managing multimillion-dollar public infrastructure builds, we’re here to help you stay protected and competitive – no matter what the market throws your way.