If history is a guide, the effects will likely be felt in short order. 

What Will Happen and When?

In the immediacy, it is unclear, however Ken Simonson, chief economist for the Associated General Contractors of America, noted that following the 2018 tariffs, domestic producers raised prices, and contractors experienced supply chain problems. 

“Construction is more reliant than most industries on imported materials, parts and components,” Simonson told Finance & Commerce last month when Trump threatened Mexico and Canada with 25 percent across-the-board tariffs before staying that decision for 30 days.

Reuters reported that analysts estimate the tariffs could add $1,000 to $1,500 to the cost of each vehicle, while appliances and machinery are expected to see similar price hikes. 

For some in the construction industry, which has faced a 46 percent increase in material costs since 2020 according to the National Roofing Contractors Association, the tariffs compound existing pressures, including labor shortages and regulatory challenges.

Supply chain disruptions are another immediate concern. According to the U.S. Department of Commerce, the U.S. imports 25 percent of its steel and 50 percent of its aluminum, and contractors are already reporting difficulties in procuring essential materials. 

The National Law Review warns that these disruptions could lead to project delays and higher costs, echoing the challenges seen during the 2018 tariffs. 

Domestic producers like U.S. Steel and Alcoa saw their stock prices increase in after-hours trading following the announcement, signaling optimism about reduced competition. 

Economists are also sounding the alarm about inflationary pressures. Deutsche Bank predicts that the tariffs could add 0.4 percent to core inflation, exacerbating the financial strain on consumers grappling with rising living costs. 

Dean Baker of the Center for Economic and Policy Research noted that if the tariffs remain in place for an extended period, inflation could climb above 3.5 percent, complicating the Federal Reserve’s efforts to stabilize the economy.  

In the mid-term, industries are expected to adapt through strategies like supplier diversification and bulk purchasing. The NRCA has advised contractors to lock in prices and explore alternative materials to hedge against volatility. 

Dr. Anirban Basu, chairman and CEO of Sage Policy Group, Inc., a Baltimore-based economic and policy consulting firm, emphasizes that regulatory relief and workforce training could help offset some financial burdens. However, these adjustments come amid growing global tensions. 

Internationally, the EU and China are preparing to challenge the tariffs at the World Trade Organization, arguing that they violate international trade norms, according to CBS News.  

Over the Horizon

Looking further ahead, the long-term success of the tariffs hinges on their ability to revitalize U.S. metal production. While the 2018 steel tariffs initially boosted domestic production by 7.5 percent, demand collapsed during the pandemic, and output remains below pre-tariff levels, as noted by the Financial Times. 

Trump claims the new tariffs close “loopholes,” such as semi-finished steel imports, but experts question whether they can sustainably boost production without significant investment in manufacturing infrastructure.  

Industries like roofing and construction may also undergo structural changes, adopting lighter materials or recycled steel to mitigate costs. The National Low Income Housing Coalition has highlighted a 7.3 million deficit in affordable housing, urging efficiency reforms to absorb price shocks. 

Meanwhile, geopolitical tensions continue to simmer. Canada’s $1.3 billion border security deal and Mexico’s paused tariffs underscore the delicate balance between protectionism and alliance management. At the same time, China’s rare-earth export controls threaten U.S. tech sectors, illustrating the interconnected risks of trade wars, as reported by NBC News.  

While the tariffs aim to bolster U.S. metal production, their broader economic and geopolitical impacts remain uncertain. Industries must navigate rising costs, supply chain disruptions, and global retaliation while policymakers grapple with inflation and legal challenges. 

As the Center for Economic and Policy Research’s Baker aptly notes, “The biggest uncertainty with inflation is definitely the tariffs.” 

The coming months will reveal whether Trump’s “America First” strategy fosters resilience or deepens economic fractures.