Trump on Tariffs

Trump’s Tariffs Driving Up Pole Building Costs

(Includes information from an April 24, 2018 article at www.villages-news.com Florida by Marv Balousek)

Federal tariffs on steel and aluminum imposed several weeks ago by the Trump Administration already are having an impact in Wildwood.

The tariffs were blamed Monday night for increasing the cost of a steel pole barn for the Public Works Department by nearly $20,000. Separately, a Wildwood company is seeking a tariff exemption.

*******, of Wildwood was selected to build the pole barn with a low bid of $79,928.

******* was the lowest bidder, but the cost is about a third higher than the budgeted amount of $60,000, said public works director Gene Kornegay.

He blamed the tariffs for boosting the price of steel.

City Administrator Jason McHugh said Primus Pipe and Tube, a Wildwood pipe manufacturer, recently asked the city to write a letter of support to receive an exemption from the tariffs. McHugh said he supplied the letter.”

Mike the Pole Barn Guru comments:

The reality is the tariffs which are taking the blame for the cost overrun are merely proposed at this point in time, they have not yet been enacted. On a prevailing wage project of this size, the steel roofing and siding for the structure probably amount to less than 10% of the total bid. In order for the price of steel to take the blame for an almost $20,000 overage, the tariffs would have to be 250%.

Building materials costs have skyrocketed over the past year – it is known as supply and demand. Our country went through nearly a decade of slow growth in the construction field, causing suppliers and manufacturers to either downsize or shutter their doors. Now, with a high demand for new buildings, the ability to fulfill needs is lagging far behind.

There are ways to help reduce the “bite” to the Public Works Department. The city should consider letting the engineered plans and materials out for bid, then purchase them direct. This would reduce the costs which contractors would typically be marking up.

Yet another solution might be to have a developer put up the new building and then lease it back to the city (for an example of how this works, read: https://www.hansenpolebuildings.com/2018/03/public-works-pole-barns/).

 

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