Spring 2018 brought a major change in American trade policy. That's when aluminum and steel tariffs came into effect, to the tune of 25 percent on imported steel and 10 percent on aluminum.
Up till then, the USA had been importing about one-third of all its steel and 90 percent of aluminum.
How will the aluminum and steel tariffs affect your business?
The measure is likely to lead to an increased number of jobs for Americans in the manufacturing sector. It could well have a very different effect on the home building industry, though.
Steel and aluminum are essential components of new construction, especially of larger residential structures like condo or apartment buildings. Increased metal prices, due to the new trade tariffs, are predicted to slow down home construction.
Home improvement work may actually pick up, as homeowners opt to stay put and renovate rather than purchase and move into increasingly pricey new construction. However, economists predict that metal prices are about to shoot up drastically, which will spill over into increased costs for home improvement equipment and supplies ranging from HVAC equipment to metal roofing.
The price of drywall
Here’s another material where you may look forward to major price hikes: Drywall. Yes, skyrocketing costs can also be expected for that inexpensive (until now) home improvement essential due to new trade tariffs on imports of Chinese goods. And China is the world's largest producer of gypsum, commonly known as drywall.
Those with an ear to the ground, economically speaking, report that Warren Buffett has been getting rid of his drywall stock. This is a huge deal because the multi-billionaire investor hardly ever sells a stock.
Home improvement pros, take note
There’s a valuable takeaway in all this for home improvement professionals: Be very careful when giving price quotes in this atmosphere of uncertainty. Give a limited time frame for how long your bid will be valid because a quote that provides you with a reasonable profit today may see you working at a loss tomorrow.