One day after President Donald Trump announced 50% tariffs on most Canadian goods — ranging from Canadian alcohol imports to cement — contractors in New York state are evaluating the potential impacts.
Cement is seen as particularly troublesome because the tariffs could impact projects ranging from backyard swimming pools and home additions, potentially resulting in modest but meaningful cost overruns, to massive public works projects with huge costs and minimal flexibility once the bidding process is complete.
“Despite what some may want you to believe, they get passed on to the end user, whether that’s a consumer or the owner of a construction project,” Mike Elmendorf, president and CEO of the Associated General Contractors of New York, said of the costs associated with tariffs.
Elmendorf said a tariff on cement would have an especially broad impact, ranging from those smaller projects to school construction to large-scale projects undertaken by the state Department of Transportation or Office of General Services. On those larger projects, cost overruns and unexpected increases can be extremely difficult for contractors to recoup.
“You might presume an escalation over the life of a construction project, but when suddenly a 50% increase on Canadian-sourced products is announced, there is no way for anyone to anticipate that,” he said. “Real concern for the construction industry here.”
The tariffs would apply to some goods that had previously been exempt under the United States-Mexico-Canada Trade Agreement. The future of that 2020 pact is now uncertain after the United States declined to extend it during a mandatory review earlier this month, triggering potentially years of annual reviews.
Trump has insisted the tariffs are a response to what he describes as decades of unfair Canadian treatment of American automobiles, alcohol and dairy products.
“It’s only a response to the way they’ve treated our farmers and our people,” he said Monday. “In all fairness to them, they need us to survive. Without us, there is no way they can survive. But they have been very tough over a period of 50 years, I would say.”
But Elmendorf told Spectrum News 1 that the issues created by the broader trajectory of Trump’s tariffs will affect American companies and consumers, large and small.
“We’ve been going through a web of tariffs that are on again, off again by the whim of the president or the intercession of the courts,” he said. “It’s certainly an unwelcome development in an environment where there have been a lot of different, potentially unrelated, unwelcome developments for the construction industry.”
He said the current questions around tariffs are being piled on top of the effects of the COVID-19 pandemic, inflation and previous tariffs.
“The volatility and uncertainty of the last five years may well be unprecedented. We still have not recovered from the massive material cost escalation that we saw post-COVID,” he said.
Meanwhile, Tom Clark, Canada’s consul general in New York, told Spectrum News 1 that this cannot be the end of the conversation. He also emphasized the uncertainty, in addition to the direct cost effects, as Canada considers retaliation and broader discussions over North American trade continue.
“We do need to sit down. We have to negotiate. We understand there are concerns on the American side. We have concerns for ourselves,” he said. “What businesses need in Western New York, Canada, all through the United States and throughout Mexico is some predictability, some stability in terms of what the environment looks like — the trading environment.”