Trump's New Tariff on Steel is Affecting Construction Industry

March 26, 2018 Karli Langner

The construction industry is already beginning to feel the sting of the new tariffs Trump placed on the steel and aluminum industry. With a 25 percent tariff on steel and a 10 percent tariff on aluminum, some developers have seen a significant price increase on steel already. Steel and aluminum manufacturers are seeing a huge increase in demand as contractors load up on inventory, hoping to avoid a price increase.

Remember last year when a 21 percent tariff was imposed on imported Canadian timber? This timber, used in 25% of wood-framed projects in the US, caused home construction prices to rise significantly. If developers chose to cut back on the use of timber last fall to save costs, and switched to steel, they now will be faced with additional price increases from the steel tariffs.

US-based steel fabricators believe the tariffs will still hurt their business as the tariffs don’t restrict the tons of fabricated steel made of foreign raw materials that is used in buildings, roads and bridges. Says one fabricator in the Engineering News Record, “Because there is still no restriction on the import of fabricated steel, we’re going to be less attractive to our customers. It’s not an issue of can we pass on an increase, customers can just look at import fabricated and see it’s the cheapest product.”

The US Steel Manufacturers’ Association feels that the tariffs will adjust imports to a more level playing field in the US. Others feel that jobs will be lost. In an article in Reason.com, “According to 2015 Census data, steel mills employed about 140,000 Americans and added about $36 billion to the economy that year, but steel-consuming industries employed more than 6.5 million Americans and added $1 trillion to the economy. In other words, for every steel-producing job that might benefit from Trump's proposed tariffs, 46 steel-consuming jobs could be hurt.”

Yesterday, Trump hit China with tariffs on hundreds of imports, while granting exceptions to the steel and aluminum tariffs to several key allies. Speculation continues for a global trade war.

Command Alkon believes that whatever the results are, businesses should focus on improving efficiencies, while cutting costs to keep projects moving forward. Using the integrated suite of Command Alkon solutions for the heavy building materials industry can help improve the performance of your enterprise. Batching, Dispatching, Automation, Quality Control, Logistics, Fleet and Workforce Management, Supply Chain Operations, Mobile Computing, Business Intelligence, and more are all made better, easier and more cost effective with Command Alkon.

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