Tariffs on aluminum, steel, lumber, and numerous other products levied by the Trump Administration will hurt a variety of domestic industries, including metal roofs, fasteners, and construction machinery, as well as sales of imported products, The Freedonia Group says in a new report.
In a white paper published this month, the Cleveland-based research group said the higher prices resulting from a combination of tariffs and increased domestic demand could lead consumers to substitute for products made from cheaper materials. In some cases, the impact of domestic price hikes could force some major players in industries dependent on cheap foreign materials to either scale back production, offshore, or shut down, it said.
Here are some takeaways from Freedonia’s report, which can be downloaded from the company’s website:
· The roofing industry could see demand could shift from metal roofs to laminated asphalt shingles or roofing tile. Plastic roofing and rubber membranes are expected to become substitutes for metal roofing in low-slope segments.
· Tariffs on Canadian softwood lumber will increase the cost of home construction. And as those costs get passed down the supply chain, home buyers may become more likely to postpone construction. That in turn will reduce business for remodelers and from manufacturers of flooring and cabinets.
· The fastener industry, an intensive user of foreign-made metal, is seeing steel tariffs cause domestic companies to lose business offshore. Mid Continent Nail, the largest domestic nail manufacturer, laid off 60 workers in June. The Washington Post reports today that the Missouri company may be out of business by Labor Day.
· U.S. tariffs on Chinese construction machinery could lead to retaliatory actions that greatly impact small producers of specialty equipment and larger producers who manufacture machinery solely in the United States.
· In response to tariffs levied on the Chinese quartz countertop industry, domestic demand for engineered stone countertops is expected to decrease significantly as consumers opt for cheaper alternatives or other cheap foreign producers.
· The leading brands of LED products and light fixtures are likely to be largely unaffected by a 25% duty on Chinese LEDs since the majority of such products are produced offshores.
· Tariffs on solar panel and roofing imports from China will lead to price hikes for comparable domestic products, likely deterring demand gains as cost-conscious consumers delay solar-related investments.