ConDig (09-Mar-18). The roll out of US import tariffs on steel and aluminum could result in the loss of 30,000 jobs in the construction industry as contractors will be forced to absorb increased costs, according to the Associated General Contractors of America (AGC).
The comments come in response to a decision by President Trump to slap a 25% tariff on imported steel and a 10% duty on foreign aluminum.
“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 proposed infrastructure initiative and potentially dampen demand for new construction projects for years to come. That is because the newly-imposed tariffs will lead to increases in what construction firms are forced to pay for the many steel and aluminum products that go into a typical construction project,” said Stephen E. Sandherr, chief executive officer of AGC.
“Firms that are already engaged in fixed-price contracts may be forced to absorb these costs, forcing them to cut back on new investments in equipment and personnel. Higher steel and aluminum prices will make the kind of infrastructure work President Trump supports more expensive, forcing federal, state and local officials to cut back on projects they can fund.”
He added that the tariffs could spark a trade war and diminish demand for private investment in infrastructure as well as construction demand for manufacturing, shipping and distribution facilities.
White House officials have said the tariffs are key to domestic and economic security and have been implemented under under Section 232 of US law, which gives the president the ability to issue tariffs based on national security concerns.
But Trump said on Thursday that the administration remains “flexible” with individual countries, while Canada and Mexico have been given exemptions as the renegotiation of a more US-friendly The North American Free Trade Agreement (NAFTA) deal continues.
“The bottom line is that any short-term gains for the domestic steel and aluminum industries will likely be offset by the lower demand that will come for their products as our economy suffers the impacts of these new tariffs and the trade war they encourage. A better way to cultivate a stronger domestic steel and aluminum industry is to increase federal funding for infrastructure projects that will boost demand for these and many other products,” Sandherr added.
“That is why the Associated General Contractors of America will continue to take every possible step to convince the administration and Congress to reconsider these costly new tariffs and instead enact the kind of new infrastructure proposal that will rebuild our steel and aluminum industries while strengthening our overall economy.”
Leaders of the US homebuilding industry have also raised concerns over the trade restrictions and said they will hurt consumers and negatively impact housing affordability as homebuilding costs could increase.
“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 US businesses that use these products, including home builders,” said Randy Noel, chairman of the National Association of Home Builders (NAHB).
“Given that home builders are already grappling with 20 percent tariffs on Canadian softwood lumber and that the price of lumber and other key building materials are near record highs, this announcement by the president could not have come at a worse time.”