Dive Brief:
- Nevada construction-related businesses are beginning to feel the sting of countermeasures imposed by U.S. trade partners in retaliation against President Donald Trump's tariffs on steel (25%) and aluminum (10%) imports, according to the Reno Gazette Journal.
- The state's steel fabricators, which were already dealing with pre-tariff price increases, have seen steel prices increase by 25% to 40% when five percent fluctuations were once the norm. The state's housing industry will also have to add the extra costs of more expensive steel products onto home prices, already up approximately $9,000 per house and $3,000 per multifamily unit because of the cost of lumber, according to the National Association of Home Builders. The administration slapped Canada with an almost 21% tariff on softwood lumber back in November. The new duties threaten steel-rich commercial and infrastructure construction budgets and could scuttle other projects altogether as extra costs are passed on to clients.
- Nevada businesses have adopted a "wait and see" approach in judging the full impact of tariffs, with some businesses, although still critical of the president's actions regarding steel and aluminum imports, wanting the federal government to negotiate better trade deals on the country's behalf.
Dive Insight:
The Las Vegas Review-Journal reported that the new tariffs could already be the reason behind higher prices for state road projects. Recently, the Nevada Department of Transportation solicited bids for what the agency estimated to be a $49 million to $59 million highway job, but only one company submitted a proposal, and that was for $61.5 million. Transportation officials said they will study the lone bid and determine if the higher-than-anticipated estimate is actually a result of rising steel prices. If so, the agency will discuss awarding the project to the contracting firm that submitted the bid. If not, transportation officials will likely restart the bidding process.
According to an opinion piece in The Hill by Thomas Gibson, president and CEO of the American Iron and Steel Institute, a North American steel producers organization, tariffs are necessary to combat the dumping of steel by some countries, especially China. Gibson said that China's export practices with other countries threatens the U.S. steel industry and that the tariffs should be given time to work while the U.S. negotiates better deals with its trade partners.
Negotiations with China, Mexico and the European Union will likely continue to be tense, as all three have instituted retaliatory countermeasures against the U.S. by imposing duties on U.S. goods.
