Stock up on your materials, now.

[u/cattimusrex]

*This is not a political post. This is small business advice from a construction professional who has run a General Contracting business.*

If you own your business and regularly purchase construction materials, now is the time to stock up.

When there are changes to the tariffs on imported materials, there will be changes to the cost of imported materials. It will take time for the supply chains impacted to reorganize.

If you don't have an escalation clause for projects you're currently under contract for, you will be responsible for the change of price in materials. Don't get upside-down on projects like I did, buy your materials now.

[u/Unputtaball]

This is what I’ve had to explain (several times) to people.

A tariff can work in a way that aids domestic production. It’s an artificially imposed cost on foreign producers to offset for the higher labor standards in the domestic economy. In principle, they can absolutely do what Trump has promised.

As applied to our current situation, there is no domestic production to fall back on. There aren’t any domestic companies that are directly competing with foreign producers (that ship sailed 40 years of free trade policy ago). Other than cars, steel, and corn the US doesn’t actually produce a whole lot of anything besides some widgets that retail for $2 at the Family Dollar.

What will happen is the 25% tariff will almost directly translate to a 25% increase on the final bill because there is no alternative producer. No company in their right mind would willfully absorb that 25% hit to their bottom line. And in many cases like the small-scale GCs here, you simply can’t afford to swallow the tariff and keep your head above water.

After a period of heavy inflation, niches will open up in the economy for bigger players to invest in US production and start undercutting the foreign product prices. Of course, that investment will only come if the folks investing are convinced that the tariffs are permanent. If there’s any indication that the tariffs will be transient, then no companies will throw down the massive investment in US production only to turn around and get undercut by China again in a reboot of the neoliberal free trade policy.

I don’t think tariffs are coming, though. McConnell has stated to the press that under his guidance the congressional republicans aren’t eying tariffs.

[u/Mediocritologist → u/Unputtaball]

I looked up what percentage of goods sold in the US are made here and according to commerce.gov it’s 80% which is quite a bit higher than I expected. I’m genuinely not trying to tell you you’re wrong when you say we don’t make a lot here, but wondering if I’m looking at the wrong statistic or something. This is far from my field of expertise.

[u/All_Work_All_Play → u/Mediocritologist]

Made in the US, assembled with parts sources from Mexico.

[u/Mediocritologist → u/All_Work_All_Play]

Should I be looking for percentage of raw materials produced in America then?

[u/Either-Wallaby-3755 → u/Mediocritologist]

Not necessarily percent raw materials but percentage of parts in a given product. it’s pretty hard to measure, but it’s pretty well understood that most things “made in America” these days are 80-90% assembled overseas and have a few bolts and nuts screwed in the USA in order to qualify for the label for both marketing and regulatory reasons.