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Weekly Roundup: Lifted steel tariffs, rising trend in construction cost, & more

Weekly Roundup: Lifted steel tariffs, rising trend in construction cost, & more

May 28, 2019

Supplier Insider is a weekly roundup of the latest news and insights relevant to construction suppliers.

US to lift tariffs on steel and aluminum from Canada, Mexico

Tariffs on steel and aluminum from Canada and Mexico are set to be lifted in the US per a joint US-Canada statement. Lifting the 25% and 10% tariffs on steel and aluminum respectively could result in the ratification of the US-Mexico-Canada (USMCA) trade agreement. NPR

  • Lifting the tariffs eases up the tension among the three nations, especially between the otherwise amicable relations between the US and Canada.
  • The decision to lift the tariffs come after the recently failed trade negotiations in Beijing, as Trump has decided to impose new tariffs on China, which is expected to retaliate by introducing its own tariffs to US exports.
  • The USMCA trade deal is Trump’s planned replacement for the North American Free Trade Agreement. Democrats have expressed concerns over the USMCA agreement over its failure to address labor and environmental issues.

US construction cost continues to rise

Labor, materials, and equipment costs in US construction has been constantly increasing in the last 31 months, according to analytics firm IHS Markit and the Procurement Executive Group. KHL

  • The engineering and construction index increased to 63.8 in May from April’s 58.2. Materials and equipment sub-indices have also increased in prices, while the subcontractor labor index has reached 60.1 from last month’s 56.
  • “[The overall increase in cost] is indicative of factors outside of material shortages – a tighter labor environment, truck shortages, and regional demand – driving the price increases,” said senior economist Deni Koenhemsi.
  • Prices for both labor and materials are expected to still increase in the coming months based on the latest figures.

Lumber export to China to face tariff increase

Following a trade standoff between the US and China, tariffs on US lumber exports are set to increase in June. ProSales

  • OSB and softwood plywood will now have a 25% tariff while D-fir and other fine lumber will face a 20% tariff increase from its current value at 10%.
  • The tariff increase in US exports comes after the Trump administration has imposed new tariffs on China. Recent discussions on unfair trade practices and intellectual property rights issues have soured the relations between the two nations.
  • President Trump and Chinese President Xi Jinping are set to have another meeting in June to continue the trade negotiations.