Trade disputes could make construction more expensive in the Midwest

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President Donald Trump has implemented a 10% tariff on imports from China and threatened tariffs on Canada and Mexico. And the impact of those tariffs could trickle down to the Midwest.

Associated General Contractors of America (AGC) Vice President of Public Affairs and Workforce Brian Turmail said the tariffs would make it more expensive for contractors to buy materials, which could be passed on to clients.

"When they want to get their school rebuilt during the summer or a new police station built, or if they want to get that electric battery plant built in their state, because it's a huge economic development opportunity, it's going to cost more and it's going to take longer to get built," he said.

He added homeowners will see the brunt of increased costs for two reasons: tariff disputes and immigration enforcement.

"It will be more expensive if you are a homeowner, to get any kind of work done or to build a new home for two reasons: One, we're making the cost of the materials used for construction more expensive. And two, we're shrinking the supply of labor that does construction work in this country," he said.

Since Midwest states receive much of their materials from Canada, Turmail said Trump’s threat of a 25% tariff would be a detriment. Much of the Midwest gets its lumber, concrete products and petrochemicals from the northern country. Fewer materials from Canada would also disrupt the transportation industry, Turmail estimated. That executive order for the increase is currently on pause. Trump has also said he will impose a 25% tariff on aluminum and steel imports.

The AGC releases a survey to all of its member firms every year to determine what challenges members foresee in the year. This year, AGC members are concerned about labor shortages and what they're going to pay for materials.

"We'd love to get a resolution of these trade disputes so that we don't have this sort of Damocles of tariffs hanging over the construction industry, because that has an impact on firms' decision making," Turmail said, referring to the ancient Greek character to symbolize ominous future danger.

Although Turmail said AGC supports securing the border, he wants lawmakers to know construction firms rely on immigrant labor, and to address labor shortages, there should be more ways for workers to be legally permitted to work for U.S. construction firms.

Anecdotally, he added some member firms have shared they have told workers to stay home due to immigration enforcement concerns. In addition to more legal work pathways, Turmail also said the construction industry would benefit from a larger push for vocational training to increase the skilled labor supply.

"And then, frankly, we need to have a serious conversation about some kind of path to earn legal status for undocumented workers who've been in this country but have been otherwise responsibly engaged in economic activity in this country," he said.

The AGC spokesperson said they are in regular conversation with lawmakers in Washington D.C.