Tariffs, Trade Wars, and the Warehouse Renaissance?

By Lorenzo Gisonda

Jun 09, 2025

When most people hear the word "tariffs," they think of politics, trade wars, and cable news arguments. What they don’t think about is real estate, and more specifically, warehouses. Thanks to tariffs, those big gray boxes you pass on the highway have a serious glow-up.

Over the past several years, tariffs along with other forces such as the rise of e-commerce, have quietly reshaped supply chains, sparked a reshoring boom, and turned industrial real estate, especially warehouses, into some of the most in-demand properties on the market. Let’s unpack how it all happened.

2018: The Year Steel Prices (and Stress Levels) Spiked

In 2018, the U.S. imposed tariffs on imported steel and aluminum. Intended to protect American industries, these tariffs had a side effect: building anything got more expensive. According to the Texas Real Estate Research Center, steel prices jumped by about 5% and aluminum climbed by 10%. Steel imports also plummeted, dropping 11.3% in 2018 alone.

If you were trying to build a warehouse back then, it suddenly cost you about 5.5% more than it would have a year earlier (ConstructConnect). Developers weren't thrilled. Some projects slowed, and others were shelved altogether.

At the same time, businesses that relied on global supply chains realized those chains might not be as reliable as they believed. Due to tariffs and geopolitical uncertainty, companies began to seriously consider reshoring operations back to the U.S.

Supply Chains Shrink, and Warehouses Grow

The idea of reshoring wasn’t just idle talk — it turned into action. Over 350,000 jobs were reshored to the U.S. in 2022, a 25% jump from the previous year (Kidder Mathews). Legislation like the CHIPS Act and the Inflation Reduction Act sweetened the deal, especially for industries like semiconductors and electric vehicles. Companies wanted to manufacture closer to home and were now being incentivized to do so, which meant they needed places to produce and store everything.

Enter modern warehouses.

Leasing activity across industrial real estate began to grow exponentially. CBRE expects leasing to stabilize at over 800 million square feet annually heading into 2025 (CBRE). Markets like Phoenix, Savannah, Salt Lake City, and St. Louis suddenly became the new hot spots, posting warehouse demand growth of over 35% year-over-year (Cushman & Wakefield).

Even the total number of warehouses tells the story. In 2007, the U.S. had about 14,600 warehouses. Today, that number is closer to 22,000 (WarehousingAndFulfillment.com). It turns out that when supply chains get shorter, warehouse footprints get bigger.

The Good News: Warehouses Are Booming

If you’re in industrial real estate, the past several years have felt like discovering a secret party no one knew about. Rents have risen, vacancies are low, and investors love the steady demand.

Warehouses have gone from boring back-end assets to strategic necessities. They’re not just places to stash pallets anymore — they’re mission-critical logistics hubs that keep supply chains moving. In the era of one-click shopping and instant gratification, whoever controls the warehouse controls the game.

As reshoring continues, so will the need for modern, flexible industrial and manufacturing space. Because much of the existing warehouse stock is old and outdated, developers with the right land and the right timing stand to benefit greatly.

The Bad News: Building New Warehouses Isn’t Easy

Of course, it’s not all sunshine and forklifts. Those tariffs that kicked off the warehouse boom also make building new ones much harder.

Construction costs have remained stubbornly high. Prices for iron and steel spiked again in early 2025, contributing to a 9.0% annualized increase in nonresidential construction input costs in just two months (Hanson Bridgett). Tariffs on key materials like steel and aluminum continue to escalate costs, lengthen delivery times, and cause shortages (Delta Consulting Group).

The result? It’s getting harder and pricier to build the warehouses that companies need. So even as demand grows, supply struggles to keep up, pushing rents for existing warehouses and those under construction even higher.

If you're a developer trying to bring a new product to market, it can feel like trying to fill a pool with a leaky hose.

2025: Tariffs Take Center Stage Again

In April, the U.S. introduced a 10% universal tariff on all imports, along with higher "reciprocal" tariffs targeting specific countries based on trade imbalances (CNN). China has faced the steepest increases to date,— but other countries, including some U.S. allies, have also felt the squeeze.

The more significant issue wasn’t just the tariffs themselves — it was the on-again, off-again nature of the policies. Some tariffs were announced, paused, renegotiated, or reintroduced within weeks (The Guardian). This stop-and-start approach has brought on a new level of uncertainty for industrial developers and supply chain planners. Additionally, higher material costs could once again squeeze construction pipelines, while reshoring efforts may get another shot of adrenaline as companies scramble to protect themselves from future policy shifts.

In short, there is more demand for warehouses, but fewer new warehouses are getting built. Sound familiar?

Strategic Moves: How Big Companies Are Doubling Down on U.S. Warehouses

Major players aren’t just sitting around watching trade policy headlines. Some of the world’s biggest companies are actively making bold moves to bring manufacturing and logistics closer to home.

Apple recently announced a $500 billion investment to expand its U.S. operations over the next four years. Part of that plan includes a 250,000-square-foot AI server manufacturing facility in Houston, Texas, expected to open by 2026 (IndustrySelect). It's a massive bet on domestic manufacturing, and it’s likely to require extensive supporting warehouse infrastructure.

Amazon isn’t sitting still either. The company is weighing a $15 billion investment into about 80 new logistics facilities across the U.S., including robot-equipped fulfillment centers that are designed to speed up deliveries and lower dependence on imported goods (Reuters).

And in perhaps one of the biggest moves of all, TSMC (Taiwan Semiconductor Manufacturing Company) is investing another $100 billion into its U.S. footprint, building three cutting-edge semiconductor plants — largely centered in Arizona (Politico). As chip production comes home, it is likely to turbocharge demand for specialized industrial space and supporting logistics networks.

Big names are making big bets, and warehouses are sitting at the center of it all.

The Bottom Line: A Warehouse Renaissance — but With a Few Unknowns

Tariffs may have been designed as a geopolitical strategy, but coupled with the rise of e-commerce, they sparked an industrial real estate renaissance. Warehouses are booming thanks to reshored manufacturing, tighter supply chains, the rise of e-commerce, and a new corporate obsession with resilience.

But it’s not a nationwide free-for-all. The growth is highly strategic, concentrated along key reshoring corridors, logistics hubs, and markets that benefit from new trade patterns. Growth markets like Phoenix, Savannah, and Salt Lake City are seeing far more action than oversaturated coastal metros.

Still, if history — and 2025’s on-again, off-again tariff drama — has taught us anything, global trade policies can shift fast. Higher construction costs, political changes, or easing tariffs could all reshape the landscape again just as quickly.

For now, warehouses are riding a major wave of demand — but exactly how long that wave lasts, and how choppy it gets, remains to be seen.

Sources:

Read more about the author: Lorenzo Gisonda

Email: lg4095@nyu.eduedu

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