New tariffs on imported steel and aluminum could cost Indiana University millions.
The taxes of 25 percent on steel and 10 percent on aluminum imported from certain countries took effect March 23, and could have a big impact for any group that buys large amounts of those metals.
IU did about $225 million worth of construction and renovation projects last year, said Tom Morrison, the university’s vice president for capital planning and facilities. On any given job, steel typically accounts for between 10 percent and 20 percent of the cost. A 25 percent price increase would be an additional $5 million to $11 million.
Of course, not all steel used on IU jobs will be imported from countries where the tariffs apply, but the tariffs will affect the steel market. Construction firms have to consider that when bidding for projects.
“If a contractor is bidding today on a contract they’re going to procure steel for six months from now, they’re probably going to guess high,” Morrison said.
Recently, bids for one IU project came in a little higher than expected. The project is a metal-sided building, but Morrison couldn’t say for sure whether tariffs affected the bids. He compared the bidding process to a game of poker; neither side wants to show all their cards. But Morrison knows the tariffs are on contractors’ minds.
“I sit down with presidents of the big firms with some frequency, and this is one of the things we’re talking about,” he said.