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July 3, 2018

Trump’s plan for infrastructure rebuild is now more costly due to steel tariffs


President Donald Trump wants to rebuild the nation’s transportation infrastructure. He also wants to strengthen the U.S. steel industry through tariffs on imports.

But that second goal could make it more costly to accomplish the first.

Since Trump announced the tariffs in March, prices have been rising for the American steel used to build bridges, reinforce concrete highways and lay the rails for mass transit systems. Though many of this summer’s big construction projects had locked in pre-tariff prices, concerns are mounting among contractors and some transportation officials that the tariffs could raise costs and delay work that is still in the planning stages.

“The president seems to be at loggerheads with two conflicting priorities of his administration,” said Brian Turmail, vice-president of public affairs and strategic initiatives at the Associated General Contractors of America. “He’s making it very difficult for construction firms and people who build infrastructure to be successful, at least in the short term.”

In Kansas City, for example, voters recently approved higher sales and property taxes to fund a streetcar extension that had been estimated to cost at least $250 million. Though the project had been in the works for a year, officials are now recalculating.

“We are anticipating our prices to increase because of the tariffs,” said Donna Mandelbaum, communications director for the Kansas City Streetcar Authority.

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Trump in February announced a $1.5 trillion infrastructure plan that would use $200 billion in federal funds to leverage state, local and private-sector investment. The proposal had yet to gain traction in Congress when the president announced tariffs of 25 per cent on steel and 10 per cent on aluminum imported from most countries. After a temporary exemption, the metal tariffs hit the U.S. allies of Canada, Mexico and the European Union on May 31.

Most federally funded transportation projects in the U.S. already are required by law to use U.S. steel. Tariffs are like taxes charged only on imported products. But because they make foreign steel more expensive, tariffs also allow U.S. steel producers to raise prices without being undercut by international competitors.

Keep reading on CTV News