Domestic Political Uncertainty
As the U. S. ramps up for its 2024 elections, the two presumptive frontrunners, Joe Biden and Donald Trump( who are ideologically different on everything from taxes and climate change to immigration and regulation), have somehow aligned themselves on their respective foreign trade policies.
In March 2018, Trump imposed a 25 % tariff on foreign steel and 10 % on aluminum in a move that he characterized then as“ necessary to protect industries ravaged by foreign trade practices,” and is“… an assault on our country ….”
To add perspective on how this affected the construction industry then( and continues to do so), the U. S. Geological Society estimates imports make up nearly one-quarter of U. S. steel consumption and half of total aluminum consumption.
For his part, Biden seems to have kept these same tenets intact and largely preserved
Trumps tariffs on steel and aluminum in an effort to maintain a protectionist trade policy, one that could continue to feed inflation prices, according to experts.
Should Trump win, he has vowed to impose a 10 % tariff on all imports and a 60 % tax on Chinese goods.
What does this mean for the construction industry? Simply put, it’ s a matter of supply and demand and trickle-down economics. That is, if materials cost more to import( or there are heavier fines and taxes for using foreign materials), the obvious answer is that those inflated import tariffs will be passed on to consumers, due to rising construction costs and limited profit from development activity until tariffs are lifted.
That said, the U. S. seems unlikely to reverse its stance on free trade, which means that protectionist trade policies will be around for the foreseeable future, regardless of who gets elected, and will directly impact the construction industry.
22 • 800-247-2000 • July 2024