Predictions are being made on what the downstream effects could be to the Commercial Real Estate market with the recent announcement concerning tariffs on imported raw materials. There is speculation that the tariffs could cause an increase in the cost of these raw materials that will ultimately be absorbed by the consumer. And, if the higher cost is passed on to the consumer, that could have an overall economic impact.
Below is an article from rejournals.com that details some of the possible effects to the commercial real estate industry from the recently announced desire for tariffs specifically on steel and aluminum. After reading the article, give us a call at Caton Commercial so we can partner with you to determine how these tariffs could impact you and how we can work together to best meet your commercial real estate needs.
Source: rejournals.com | Re-Post Caton Commercial 3/14/2018
President Donald Trump moved to place a tariff on imported raw metals last Thursday and these new duties are already seeing economic reverberations, increasing volatility in the equity markets. But could they have ramifications on commercial real estate?
Trump’s announcement of 25 percent steel and 10 percent aluminum tariffs was intended to preserve steel production jobs in the U.S. and reduce the nation’s trade deficit. While it caught some off guard, it probably shouldn’t have.
“The announcement may have been a bit surprising and I think it shocked the market a little bit. But the position is not,” said Jason Tolliver, vice president Americas and head of logistics and industrial research at Cushman & Wakefield. “The president was very clear during his campaign … that this is the policy and the direction that they’re going.”
Time will tell whether the tariffs will achieve either of the president’s policy goals. Any impacts on commercial real estate may also take time to observe. But the implications could be significant, as 42 percent of U.S. steel is consumed by the construction industry and the price of steel mill products has increased 19.3 percent since March 2016, according to Cushman & Wakefield research.