Opinion—Steel Tariffs Will Hurt the Construction Industry

Apr 27, 2018

By Don Wallis

The tariffs will increase the cost of federal infrastructure projects.

There is no question that China’s trade practices are unfair to American exporters.

President Trump’s response to this situation has been to propose imposing retaliatory tariffs on steel and aluminum imported from China, and other countries.

In the long-term, this may even the trade imbalance between the U.S. and the rest of the world; in the short-term, the tariffs will have a significant negative impact upon the construction industry.

Noah Smith, in an article in Bloomberg.com, estimates the construction industry is responsible for 30 percent of the steel used in this country. “There’s also the danger that making metals more expensive will hurt a lot more U.S. manufacturers than it helps. The construction industry would take the biggest hit. Import taxes will tend to drive already exorbitant U.S. construction costs even higher, hurting commercial development around the country.”

Grace Donnelly, writing for FORTUNE magazine, concurs with this analysis. “The higher price of steel will also impact the construction industry, which uses the material for beams …”

“The nation’s largest trade group for the construction industry [Associated General Contractors of America] says nearly 30,000 jobs could be lost in the building trades from the steel and aluminum tariffs President Donald Trump is imposing” according to research by Rick Barrett of JS Business. “’These new tariffs will cause significant harm to the nation’s construction industry, put tens of thousands of high-paying construction jobs at risk, undermine the president’s infrastructure initiative, and potentially dampen demand for new construction projects for years to come,’ Stephen Sandherr, AGC’s chief executive officer, said in a statement.”

Industry leaders interviewed by Patrick Sisson for CURBED.com reinforced this gloomy prospect. “’This announcement by the president could not have come at a worse time,’ Randy Noel, chairman of the National Association of Home Builders, said in a statement. ’Tariffs hurt consumers and harm housing affordability.’”

“According to Neel Khosa, vice president of AMSYSCO, an Illinois-based company that manufactures steel post-tensioning wire for parking garages and high rises, such as the 55 Hudson Yards project in Manhattan, the tariff will have a negative impact on the construction industry by introducing price uncertainty. Until the market stabilizes, introducing the proposed tariffs will lead to price volatility.”

If you have not already done so, I urge you to inform your legislators of the dire consequences the steel tariff will have for the construction industry.

Sources—

Trump’s Tariffs Look Like a Self-inflicted Wound, Noah Smith, Bloomberg.com, March 7, 2018.

These Are the Industries That Will Be Most Impacted by Trump’s Steel and Aluminum Tariffs, Grace Donnelly, FORTUNE, March 2, 2018.

Builders say U.S. construction jobs will be lost from steel tariffs, Rick Barrett, JS Business, March 9, 2018.

Trump steel tariffs will make construction, infrastructure projects more expensive, Patrick Sisson, CURBED, March 8, 2018.

 

Don Wallis has more than 40 years experience in residential and commercial construction, and land development. He also has a law degree and currently teaches Environmental Law at Santa Fe Community College.