President Trump has recently approved 25% tariff hike on steel imported from the rest of the world except NAFTA partners. While such a tariff increase creates a favorable treatment for the US Steel Producers, it hints for considerable negative impact on the US economy and job market as it hinders fair trade by protecting US Steel Producers with artificial trade barriers and allowing them to increase their profit margins at the cost of US consumers. According to the American Iron and Steel Institute, 2016 US Steel Market can be summarized:
The data shown above indicates that construction sector with the consumption of 43% of steel supply takes the first place and will feel the highest negative impact of tariff hike on steel. According to census bureau trade statistics, only 30% of the imported steel comes from NAFTA partners, the rest has to be imported from other countries. Due to the new measure implemented, some of this import will apparently shift to NAFTA partners. However we know that 90% of Canada’s steel export has already been destined to US market, while Mexico’s imports of steel from the USA is higher than its exports to the US.
On the other hand according to an Article “Apartment Construction Delay Estimate: 56,000 Units” published on Axiometrics website it is estimated that some 56,186 units will be delayed into 2018. That figure is up from 50,658 delayed from 2016 to 2017, which in turn was a huge leap from 14,805 from 2015 to 2016. According to Dave Sorter, author of the article, with construction labor shortages and the high cost of building materials, apartment construction delays will likely continue.
This leads to the conclusion that if the US steel producers cannot keep up with the local steel demand and increase its prices as expected in a protected market, the trouble on the supply side of construction sector will wor