A couple of our customers have asked about the impacts the new steel tariffs might have on construction cost. There will now be a 25% tax on imported steel and a 10% tax on imported aluminum coming in from most countries. While I believe the steel production is currently healthy in the US, we still import a large percentage of our steel.
If the tariffs stick, the trickle down effect could be costly. I reached out to two of our steel fabricators on the east coast to ask their outlook. One of these friends said that he thinks the increased tariffs could add as much as a $1.50/sf to the cost of a building, in round numbers. Another way of considering, depending on the type of structure, is that the tariffs might raise the cost somewhere slightly more than 1%.
Nucor, one of the largest joist fabricators, if not the largest, raised pricing $45 a ton the first of March. This translated to a 5% increase in the finished product, almost overnight. This was followed by some fairly decent increases in the steel cost the past 90 days, as it would seem that steel producers anticipated the new tariffs.
What’s on the horizon may be a mystery, but for now, we are dealing with the weight of these increases.
