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Are Steel Tariffs Going to Hurt the Construction and Crane Industries?
What will the steel price increase do to the crane industry?
Shortly after President Trump enforced 10 percent aluminum tariffs and 25 percent steel tariffs, construction industry insiders noted that their steel costs rose to 10 percent, as stated in a National Real Estate Investor report.
It is too soon for the cost of raw materials to affect manufacturers of construction equipment like mobile cranes, so how is this possible? Apparently, the assumption that prices will rise in the future is why they are currently increasing.
The Trump Administration and Tariffs
Trump claims that his goal is to encourage U.S. companies to purchase aluminum and steel from domestic producers, causing them to create more aluminum and steel and hire more people. Because aluminum and steel jobs have decreased in recent years, steel-producing states are hopeful that this could result in more jobs.
Critics declare that these tariffs will damage industries that rely on aluminum and steel, specifically construction and auto, which employ over 7 million workers combined. Steel, in comparison, employs roughly 160,000. They might also create a trade war that will damage several other industries and create higher prices for all.
An increase in efficient production techniques might be more to blame for the decrease in steel jobs than foreign competitors. It takes a mere 1.5 worker hours to produce one ton of steel nowadays. In 1980, this process took over 10 hours.
As with other manufacturing jobs, automation and technology are to blame for loss of jobs—not foreign production.
Last year in the U.S., 1.2 million tons of fabricated steel were produced using imported materials–the majority of which was used for roads, bridges, and buildings. Because the tariffs target “raw” steel, American steel manufacturers might be hit the hardest. Engineering News Record has noted that certain domestic fabricators have lost jobs already to foreign competitors.
Don’t Panic – Too Much
The panic isn’t unprecedented. A tariff implemented on imported Canadian timber in November created a nationwide increase in costs of home construction. In response, contractors have been increasing construction costs. However, the tariffs imposed by Trump don’t currently include Canadian or Mexican steel. At 16.7 percent of total imports, Canada is the number one foreign supplier of steel in the U.S.; and at 9.4 percent, Mexico is number four. South Korea and Brazil come in second and third. China, Canada, the United Arab Emirates, and Russia are the top four countries sending aluminum to America.
We are currently unaware of how the tariffs will affect the continuous construction boom, but the steel industry is still on board with the president’s daring plan.