Trump steel tariffs will make construction, infrastructure projects more expensive

infraestructure more expensive Trump steel tariffs

Trump steel tariffs will make construction, infrastructure projects more expensive


The proposed steel and aluminum tariffs President Trump announced last week made domestic steel and aluminum mills very happy. But the potential shift in metal prices has many industries, including construction, expecting higher costs, and may also impact infrastructure spending across the nation.

In a study released yesterday, the D.C.-based Trade Partnership, an economic consulting group, projected that 28,000 jobs would be lost in the construction industry alone due to the tariffs.

Last Thursday, President Trump proposed imposing a 25 percent tariff on imported steel and a 10 percent tariff in imported aluminum.

The tariffs, and expected increase in the price of raw materials, especially in the short term, comes when the country faces an acute affordable housing shortage and political leaders are debating a national infrastructure plan. The cost of action on both fronts may be increased due to rising aluminum and steel prices.

“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.

“Supplier uncertainty leads us to be uncertain,” he says. “I think it’s going to be a big positive for those who make steel and aluminum in the United States. So several thousand people in those industries will benefit, while several million people will have their wealth re-allocated to those people.”

Not all building projects use a massive amount of steel, of course, and the impact will vary by building type. Single-family homes require much more wood than metal, with steel and aluminum contributing to between 0.5% and 1% of a home’s cost, according to Marketwatch. But larger buildings, including multistory, multifamily construction, require a higher percentage of steel, meaning tariffs will have more of an impact. Even those that are mostly concrete require steel supports and rebar, as well as aluminum window cladding.

Steel and aluminum prices will also impact infrastructure projects. Khosa feels that the proposed tariffs will make it that much harder to pass an effective infrastructure bill because of resulting price increases and uncertainty.

“The steel tariffs will shoot Trump’s infrastructure plan in the foot, to some degree,” Khosa says.

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