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In March, President Donald Trump signed an order that increased steel tariffs by 25 percent. The new policy, which aims to boost American production of steel, could potentially raise construction costs. From New York to California, builders may feel a pinch because of this new trade policy.
The Facts about America’s new Steel Tariffs
The new steel tariffs went into effect on March 23, 2018. It increased the cost of imported steel by one quarter of its original price.
- America is the world’s largest importer of steel.
- In 2017, the U.S. imported approximately $29 billion in steel.
- America imports 33 percent the steel it uses.
- Nearly 60 percent of this steel is exported from just five countries, including Canada and Mexico.
- American steel mills currently operate at 75 percent capacity.
- The new tariffs could increase the price of steel $175 – $200 per ton.
- 43 percent of all steel shipments in the United States were for construction projects.
- It is estimated that the overall cost of building construction could rise less than 1 percent.
- 30,000 construction jobs are projected to be lost as a result of the tariffs.
How the Policy Impacts the Construction Industry
From structural concrete to steel framing, raw steel is a common material used in construction projects. The Federal government’s new steel tariffs will likely reduce the immediate availability of these materials, impacting the construction industry in these three major ways:
- The cost of key building materials may increase.
- The price of steel in the U.S. may become more volatile.
- New construction projects could slow down.
‘Tariffs will Translate into Higher Costs’
Randy Noel, the chairman of the National Association of Home Builders recently expressed concern over the new tariffs. “It is unfortunate that President Trump has decided to impose tariffs of 25 percent on steel imports and 10 percent on aluminum imports. These tariffs will translate into higher costs for consumers and U.S. businesses that use these products, including home builders.”
Although some, like Noel, have said that the tariffs could hurt the construction industry, it is still too early to tell exactly how the new policy’s impact will trickle down to the average contractor.
