The recently-enacted tariffs on steel and aluminum have raised the price of these imports, and builders and contractors are feeling the impact. The 25% tariff on steel imports and the 10% tariff on aluminum imports have rattled the construction industry, which relies heavily on steel and aluminum for projects.
In a recent study by The Trade Partnership, it was predicted that as many as 28,000 construction jobs could be lost as a result of these tariffs, as well as impacting the already acute shortage of affordable housing across the country.
In an ever-changing economy, it’s possible that things may cool down in the future, but it’s always best for businesses to be prepared for the worst-case scenario. Trade policies and tariffs may be far beyond your control, you can still be proactive when it comes to protecting your business. Here are a few ways builders and contractors can save money and prepare for the unpredictable:
1) Make important purchases before prices go up
As prices continue to climb, it’s a good idea to stock up on essentials before they get any higher. Making bulk purchases now could benefit you down the road — especially if there are any supplies that are especially important to your business that may continue to be impacted by tariffs and trade regulations.
2) Re-examine your profit margins
When faced with new or unexpected financial changes, it’s never a bad idea to take a look at where you can absorb or offset some of your costs. If things are already running thin, the rising costs of operations may be difficult to manage without increasing your prices. Planning ahead will help you navigate the financial landscape even more smoothly in the future.
3) Solidify your supplier rates
If you have ongoing relationships with any suppliers, now might be a good time to take a look at your terms. If possible, try and lock your suppliers into a long-term deal while their prices are still manageable for you to avoid any future tariff-induced price increases.
4) Buy domestically-manufactured products & products compliant with the Buy American Act
It may seem obvious, but buying products manufactured in the U.S. is an easy way to avoid tariff- related price jumps. This isn’t always as clear-cut as it sounds, so make sure to do your research before making any assumptions. A good way to narrow things down is to check for products that are compliant with the Buy American act.