CITY HEIGHTS (KGTV) — As President Trump's 25% global tariff on steel and aluminum takes effect on Wednesday, Canada and the European Union swiftly respond with retaliatory measures.
Canada has announced its own 25% tariff on nearly $30 billion worth of American goods, including steel and aluminum. Similarly, the EU has declared tariffs against the U.S. that will impact approximately $28 billion worth of U.S. exports.
Amidst this escalating trade war, general contractors find themselves caught in the middle.
ABC 10News visited a job site called Cuatro at City Heights, where an affordable housing complex is underway and set to open later in 2025.
The raw materials visible on-site, from lumber to steel, have become hot commodities as the U.S. imposes tariffs on one of its biggest suppliers, Canada.
Patrick Early is the Senior VP of Allgire General Contractors, the general contractor for the affordable housing project.
Early said their Canadian suppliers have already started sending out notices warning of potential cost increases due to the uncertain tariff situation.
While Early doesn't anticipate feeling the full impact of the tariffs immediately, as current projects like Cuatro already have their materials sourced, he said that future projects will likely be affected once the existing U.S. supply runs out.
To protect his business, Early said he may need to add contingencies to their proposals, potentially increasing costs by 10-15% on certain line items. This approach, however, turns contract negotiations into a game of chance, hoping no new tariffs will be introduced.
Early draws parallels between the current trade war and the impacts felt during the COVID-19 pandemic.
"When COVID hit in March of 2020, we didn't immediately see prices increase in the construction market, but a year or two later, we did," Early said.
The future of affordable housing in San Diego may face challenges as a result of these trade tensions.
Mayor Todd Gloria's office said they've been rapidly building affordable housing, even doubling the amount of homes in 2024 compared to previous years.
Despite these efforts, the mayor's office anticipates a slowdown in construction,
"due to the tariffs and economic uncertainty around labor, availability of construction materials and federal tax policy."
