It seems like our executive branch is playing a baseball game with the tariffs. Everyday is like a replay of the old Abbott and Costello, skit “Who’s on First.” The White House promised to restore a true 25% tariff on steel imports and elevate the tariff to 25% on aluminum imports, eliminating the loopholes that previously existed. Now they seem to be pulling back the tariff talk.
At the same time, there is a decent chance these changes might affect construction pricing. Assuming they stay, I asked our estimating team to share a few thoughts including the input of two our trusted trade partners. The consensus was the same: We are in “wait and see” mode. We don’t know an exact date when these regulations will go into effect, or if it will actually happen. In the meantime, we are seeing raw materials prices jump up a bit, but this is not so out of character for Q1 pricing. Some of the steel price increases we are seeing can be attributed to the expected tariffs and some is hedging by vendors using the word “tariff” in their communications.
One of our long-time red iron fabricators said they expect steel pricing to increase this spring and then level off into the summer and fall. He is betting that the current tariff discussions do not have stickability. We asked him what kind of increase he would estimate at the present, and he said he is thinking maybe in the 10 to 20% range.
