Like it or not, we are all a part of a global trade system. At its best, this system is convenient and allows us to buy inexpensive products from around the world. At its worst, we’re subjected to expensive tariffs and international trade disagreements that make international commerce more complicated.
You might have noticed that metal building prices are on the rise, and that’s not because we’re marking up the cost of our structures to make more profit. It all comes back to steel tariffs, and their impact on prices nationwide.
When the U.S. government levied 25% tariffs on all imported steel in 2018, the price of steel shot up. Even U.S.-made steel experienced a 41% price increase. That’s good news for steel producers but bad news for any company relying on steel in its supply chain.
With no end in sight for these price increases, the world is learning to adapt. Here’s how tariffs might affect your metal building prices.
How do Steel Tariffs Work, Exactly?
Most countries implement tariffs on foreign products in order to boost prices domestically. In terms of the 2018 steel tariffs, the U.S. government recognized that American steel manufacturers were struggling to keep up with cheap imports.
The administration hoped the tariffs would allow U.S. steel manufacturers to increase their prices and reinvest in jobs, equipment, and infrastructure. The success of these measures is a matter of debate that goes beyond the purview of this article.
Within minutes of the announcement, steel experienced a price spike that has yet to normalize more than three years later. Add COVID-induced supply chain bottlenecks into the mix and it’s unlikely that steel will ever return to pre-2018 levels again.
6 Ways Steel Tariffs Affect Metal Building Prices
- Inflation: You’ve probably read about record inflation spreading across the globe due to COVID-19. Steel’s price increase is the result of both natural inflation and tariffs. That means consumers will need to pay even more than the roughly 5% market-wide inflation rate.
- Underemployment: Just like inflation, underemployment is generating headlines on a daily basis. As steel mills struggle to fill vacant positions, steel production has slowed down and supply has dwindled, which contributes to price spikes.
- Public Perception: Steel prices are extremely volatile. Even the unfounded perception of an impending steel shortage can cause prices to skyrocket.
- Tariffs on Other Materials: Steel is made with iron ore and a variety of other compounds like manganese, chromium, and phosphorous. Tariffs affecting any of steel’s ingredients can adversely impact the overall price.
- Deceptive Practices: Beware of certain metal building companies quoting pre-tariff prices and adding hidden fees to make up for lost revenue. If a metal building’s price is markedly lower than the rest of the industry, proceed with caution.
- Unpredictable Demand: In March 2020, COVID-19 caused the world to screech to a halt. Personal and commercial metal construction projects languished, and demand for steel plummeted. As governments lifted lockdowns, demand increased faster than supply could ramp up. The resulting discrepancy boosted steel prices around the world.
How to Get the Best Metal Building Price Now
With no end in sight, it’s important to follow the news and stay informed about upcoming steel price hikes. Any policy changes or shifts in the workforce could create a domino effect that spreads through the industry.
If you’re in the market for a custom metal building, lock in your metal building price now so you’re not vulnerable to inevitable future price increases. A reputable metal building company will give you a final price in writing, without additional fees and upcharges.
Check personal reviews and testimonials to ensure you work with only the best metal building company. Once your price is set, you won’t have to worry about steel tariffs and unpredictable fluctuations in cost.