Tariffs Create Uncertainty; Won’t Slow Momentum
Wed, June 13, 2018 - 12:00am
As of last week, President Donald Trump’s statement to impose steep tariffs will subject Canada, the European Union and Mexico to a 25 percent tariff on steel and 10 percent on aluminum Over the past couple of months, I’ve spoken to folks about what these tariffs could mean for our businesses. No one really has a solid answer, outside some certainty around temporary logistical headaches.
Take a look at the poll that ran in Window & Door in March, back when the president first announced his plans for the tariffs. Forty-seven percent of respondents expect the tariffs to hurt the residential fenestration market; 34 percent expect them to be helpful; 12 percent report expecting no impact; 7 percent are unsure.
In the immediate term, I think that’s the biggest impact here: uncertainty. It’s clear that we will feel some of the impact in rising prices for building materials. But will housing starts take a nose dive? How will things play out in the long-term?
I don’t think we’ll feel a major impact on the housing market at large right now. Builders are going to continue to build, even if they feel a bit squeezed when it comes to selecting materials. Housing starts fluctuate month-to-month, but new homes will keep going up. Some short-term volatility aside, I don’t expect we’ll see a statistically relevant impact over the next year or so.
The reality is, most new home and multifamily construction is reliant on lightweight building materials, utilizing traditional steel and aluminum as necessary reinforcement—not the star of the show.
Regardless, President Trump has continually indicated his intention to remake American trade deals. It’s worth continuing to keep our eyes on what moves the administration continues to make. For now, we’ll keep building.