Mark Twain is supposed to have said, “Everybody talks about the weather but nobody does anything about it.” The same could be said about tariffs and our current trade war.
And that’s largely because no one cares about them … until they affect one’s own pocket. And they are already affecting some San Fernando Valley pockets.
Today, America is divided into two camps regarding tariffs. Pro-Trump camp members say, “The president is protecting our industries against the unfair trade practices of other countries.” The anti-Trump camp members say, “No good will come of starting a trade war; we alienate our allies and cause goods at home to increase in cost.”
In July, the administration imposed a 25 percent tariff on $34 billion worth of Chinese imports. Accusing the United States of being a trade bully, China has retaliated by imposing tariffs on American goods of equal value. The United States plans tariffs on an additional $16 billion of Chinese goods; and that’s just China. The trade relationship between our two nations is worth about $650 billion each year, and represents the largest trading relationship between any two countries in the world.
The United States is the world’s largest steel importer; in 2017, that amounted to 35 million metric tons, or 33 percent of the total steel used in the country. The biggest impact will be on structural steel used in steel-framed buildings.
The National Association of Homebuilders is just one of several trade organizations that has come out against the tariffs because higher steel costs will raise construction costs for its members, which could eventually could be passed on to homebuyers.
The president’s tariffs on steel and aluminum imports have, according to the Horton Group, a large insurance, employee benefits and risk advisory firm, “rattled financial markets and sparked concerns about global trade. The construction industry is bracing for the effects of the tariffs, as it relies heavily on steel and aluminum for its projects.”
Last year, the president hit five Canadian lumber companies with tariffs between 3 and 24 percent. Since then, according to Bloomberg data, lumber prices have jumped 31 percent.
The New York Times in an Aug. 12 article headlined “New Tariffs Could Make Apartments More Expensive,” noted “The Trump administration’s new tariffs on imported metals are rattling the construction industry and sending ripples of anxiety through related concerns.” The article outlined how the tariffs will eventually raise costs throughout the real estate and housing markets.