The Effect of Tariffs on Healthcare Construction Part 2
Healthcare construction is an important part of our nation’s infrastructure. Without hospitals, doctor’s offices, and urgent care facilities, it would be impossible for our population to stay healthy. A nation plagued by sickness and disease will inevitably wind up with a stifled GDP and an inability to compete with its neighbors. That is why some critics believe the Trump administration’s recent tariffs can pose a danger to the future of our nation. These tariffs will result in a significant boost to the price of materials commonly used for healthcare construction.
In part one, the Florida contractor attorneys at Cotney Construction Law introduced the effect of tariffs on healthcare construction, focusing on the material impact of tariffs and what actions should be taken by healthcare construction contractors now that these tariffs have taken effect.
Healthcare Construction Costs
Healthcare construction requires a substantial amount of building materials including steel, concrete, glass, and specialty finishes that are often sourced from places outside of the United States. Typically, building material costs assume between 30 percent and 70 percent of the total project budget for healthcare construction. In some markets, steel has risen in price between 10 percent and 18 percent which threatens to inflate the cost of projects to unprofitable levels.
Healthcare providers are concerned about the future of healthcare construction, but that is not their only worry. In addition to the new tariffs, healthcare providers are dealing with the cost of implementing new electronic health record systems, drug shortages, decreasing reimbursement levels, retaining old infrastructure, and an array of other priorities. Wherever finances are redirected, there will be a shortage of funds in some other vital area, which could offset productivity by years, especially with another wave of tariffs slated for 2019.
Stimulating American Jobs?
By adding tariffs to foreign building materials, the Trump administration hopes to stimulate job growth for manufacturers in the United States. In some instances, this has proven to be a successful tactic. However, since most domestic materials suppliers charge higher prices for their supplies, the construction industry is taking the brunt of the financial backlash. For contractors, this means reducing pay and laying off staff to maintain profitability. Economists have warned that becoming entrenched in tariff wars could result in a net loss for the economy of the United States.
Tariffs will undoubtedly put a strain on the construction industry as our nation attempts to level the playing field with China. If you are concerned about the effects of tariffs on your contracting business, consult a Florida contractor attorney.
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Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.