On March 7, 2018, President Donald Trump announced plans to sign an executive order establishing tariffs on imported steel and aluminum. In this six-part article, we will discuss the impact that a tariff can have on the construction industry. As Sarasota construction attorneys, we always keep a watchful eye out for developing news stories that impact the construction industry. If you are in need of any legal counsel at this time, please contact a Sarasota construction lawyer today. If you are not in need of any legal assistance, please read about this developing news in Washington.
A “tariff” is a tax imposed by the government on certain imported and exported items. The recent announcement by President Trump that a tariff would be imposed on imported steel and aluminum has quickly become a popular talking point around the globe. The executive order, which could take effect by early April 2018, calls for a 25 percent increase on steel imports and 10 percent increase on aluminum.
Neighboring Countries Exemption
Countries that are exempt from the tariff will be determined on a case-by-case basis with neighboring countries Canada and Mexico set to receive a 30-day exemption from the new policy. However, the ongoing negotiations of the 1994 North American Free Trade Agreement (NAFTA) could impact whether or not Canada and Mexico are exempt long term from this significant tax. Allowing these nations to be exempt is a critical component of the tariff as Canada is currently the United States’ primary importer of steel and Mexico is fourth.
The Impact On the Construction Industry
As we will discuss throughout this series, the positive spin of instituting such a tariff is that United States steel corporations could see a rebirth as many buyers will need a new local supplier of steel and aluminum. The negative spin is that this tariff will greatly impact industries that rely on steel like the construction industry. These steel-dependent industries may experience significant increases in purchasing prices that can affect the overall construction process. In addition, a tariff can also create a lot of friction with other countries that may escalate into a “trade war” that affects many other business practices.
In the second section of this series, we will discuss America’s history in steel manufacturing to develop a better understanding of the current state of steel production. In the third section, we will discuss the immediate benefits this tariff provides to national steel companies. In the fourth, fifth, and six sections, we will discuss the significant impact this tariff may have on the construction industry.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.