In the first section of this six-part article, we discussed the new tariff on steel and aluminum. As we covered in sections two and three, domestic steel production has dwindled over the years and this tariff was created to bolster national steel production. In sections four and five, we talked about how this tariff may improve steel manufacturing in America, but it may affect steel-reliant industries like the construction industry. As we will discuss in this section, a tariff can also create friction with the global trade market that can also affect the overall economic welfare of the nation.
When a tariff is imposed that prevents foreign nations from participating in lucrative trade deals with the United States, this is often met with retaliation by the excluded nation. In some cases, this can escalate into an all-out “trade war.” For example, if the European Union is blocked from importing steel and aluminum into America, they may retaliate by placing tariffs on American made products like iPhones or blue jeans. This same concept can be applied to the construction industry as well and could affect many worldwide, high-tech enterprises established in America like equipment manufacturer, Caterpillar.
Meeting the Demand
Overall, it’s never a good thing to have a volatile trade market, uncertainty in the job sector, and the construction process impeded. This will ultimately lead to stunted economic growth. In addition, if a US company experiences higher production costs, they will find it challenging to compete with more cost-effective competitors in the global trade market. If a trade war were to escalate because of a tariff, it also puts a lot of weight on the shoulders of the national steel and aluminum manufacturers. After decades of downturn in steel production, domestically produced steel would need to meet a much higher level of demand.
Growing Concern Among Industry Professionals
Naturally, many construction industry professionals are concerned about the impact this tariff could have on future projects. After all, over half of the world’s steel is utilized by the construction industry and America is the largest importer of steel in the world. Imposing a tariff on imported materials can affect the construction process and drive a wedge between worldwide companies established in America and their significant partnerships with foreign firms. A tariff can not only create instability in the purchasing market and affect a company’s bottom line, it can also impact contractual agreements and create delays on projects. When contracts need to be terminated or renegotiated or delays happen, you will need the services of an experienced Orlando construction attorney.
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.