Trump's steel and aluminum tariff hike creates uncertainty for construction in Waterloo region

Additional U.S. tariffs on steel and aluminum may stall or even cancel some construction projects in Waterloo region, a local builder warns.

Jeff MacIntyre, president of the Grand Valley Construction Association, says the tariff hike will make more developers apprehensive about moving forward with a project. 

"It's just another one of the things that have added up to make people a little bit more cynical and scared to proceed with projects." MacIntyre told CBC K-W's The Morning Edition on Thursday. 

"It's a moving target," he said.

At midnight on Tuesday, U.S. President Donald Trump slapped an additional 25 per cent levy on steel and aluminum, bringing the total to 50 per cent.

MacIntyre says that although the new tariff will increase costs, he wants to make clear it's not to the degree some people may think.

"Your new condo is not going to cost 50 per cent more because of this," he said. 

While a single construction project will not be tariffed 50 per cent, the level to which it is taxed depends on what type of structure is being built. According to MacIntyre, it can vary from five to 10 per cent.

Materials like structural steel are available in Canada but components made in Europe and moved to the United States will drive up costs.

MacIntyre says uncertainty is making it difficult for developers to move forward with building projects.

"They can't budget and as a result of that, they're afraid to pull the trigger on a project. They're just going to be punting them out a bit or ultimately stopping some of them for a while," he said. 

Full impact not yet known 

MacIntyre added that it's not clear how much the increase will impact costs to the local construction industry. Typically, developers and contractors agree on a fixed price for a project two years in advance. But now MacIntyre is seeing situations where the fixed price is only being held for three days, making it difficult to know how much future construction projects will cost. 

"We can't build going forward unless we reduce some of these variables," MacIntyre said. 

He added that this uncertainty will hurt the local economy, saying 10 to 12 per cent of the region's population work in or adjacent to the construction industry. 

"It's a big industry with a big impact and it's certainly going to hurt people," he said.

Federal response

The federal government hasn't said how it will respond to the tariff increase.

Prime Minster Mark Carney called it "unjustified" and "illegal" but did not specify what the government's actions would be going forward. He said a response to the tariff would take "some time" as the federal government is currently in discussions with the United States over future trade. 

When asked about possible counter-tariffs, Industry Minister Mélanie Joly brought up the government's 25 per cent tariff on $30 billion worth of U.S. goods. 

"We have had really strong counter-tariffs against the Americans already," she said. "We are looking at different scenarios right now, and we will make a decision, but we need a little more time right now," she said. 

Reaction from steel and aluminum industry

Catherine Cobden, CEO of the Canadian Steel Producers Association, told CBC News on Tuesday that a 50 per cent tariff means that the U.S. market is basically "completely closed" to Canadian steel.

She said she is expecting to see more job losses on top of the ones already lost to the initial 25 per cent tariff. 

Keanin Loomis, president and CEO of the Canadian Institute of Steel Construction, said that Canada needs to "forcefully respond" to these additional tariffs. 

He's calling for more retaliatory tariffs to be added to goods entering from the United States but cautioned that this should be done carefully to minimize blowback on Canadian businesses. 

Bea Burke, president of the Canadian Labour Congress (CLC), urged the government in a press conference to act with "strength and with purpose" during this trade war. She said the CLC, which represents the majority of unions across Canada, is calling for emergency reforms to employment insurance to support workers who lose their jobs, made-in-Canada tax credits to incentivize Canadian sourcing, and a "firm commitment to use Canadian-made steel in all public infrastructure."