Coping with Construction-Related Tariffs
In the current politically charged environment, construction owners must continue to meet financial challenges, including tariffs on products frequently used in their industry.
Notably, tariffs have been imposed on aluminum and steel, among other commodities. What’s more, the situation is fluid and constantly evolving.
How can you navigate through this minefield? Calmly deal with the tariffs in your typical businesslike manner, guided by your professional advisors.
How Tariffs Work
A tariff is akin to a tax on imported goods. Generally, it is paid directly by the importer, not by the exporting country. When the United States imposes a tariff on goods from a foreign country, it is paid to the U.S. Customs and Border Protection Service at the border by a U.S. broker representing an importer.
President Trump has aggressively instituted tariffs. After authorizing a 30% tariff on solar panels and a 20% tariff on washing machines, the president imposed a 25% tariff on steel and a 10% tariff on aluminum imported from most countries. On June 1, 2018, these tariffs were extended to Canada, Mexico and the European Union. (Only Australia and Argentina remain exempt). Five days later, the Trump administration announced a 25% tariff for hundreds of categories of goods imported from China.
Questions to Ask
With that in mind, here are the answers to several questions that construction firm owners may have about the recent introduction of tariffs.
Practically speaking, much of this is best left to the attorneys, so make sure you have a reputable practitioner on your side who is experienced in construction matters. With the benefit of foresight, take the time to research the situation and address these issues well before your crews begin working on the job.
Give yourself enough time to negotiate the key terms into the contract for your satisfaction.