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Accounting inventory before applicable tariffs take effect. Doing so can lock in lower prices while ensuring a steady supply of materials. It’ s important to carefully consider your future needs when pursuing this strategy. That will help you balance your inventory levels and storage costs with general cash flow considerations.
5. Leverage tariff exemptions and trade programs Stay informed about any tariff exemptions, trade programs, and agreements that may become available and which could benefit your business. Some materials might qualify for exemptions or reduced tariff rates under certain trade agreements. Programs like the Generalized System of Preferences( GSP) provide duty-free treatment for certain goods from eligible countries. Consult with a trade expert or customs broker who can help you identify opportunities for various forms of tariff relief.
6. Innovate with alternative materials Exploring the use of alternative materials not subject to tariffs can help mitigate the cost increases associated with conventional materials subject to tariffs. Innovations in the construction industry have led to the development of cost-effective and sustainable alternatives. For example, recycled materials, engineered wood products, and locally sourced materials may be able to replace imported goods entirely, helping businesses avoid tariffs without compromising project quality.
7. Enhance cost efficiency Enhancing cost efficiency in other areas of your business could prove helpful in mitigating the impact of tariffs. This might include efforts to optimize supply chains, improve project management practices, reduce waste, and enhance productivity. Investments in technology and automation can help you streamline operations and reduce costs, mitigating some of the financial burden that tariffs represent.
Conclusion
The tariffs on imported construction materials present significant challenges for the industry, driving up costs and challenging project timelines. By diversifying suppliers, sourcing materials from domestic producers, negotiating favorable contract terms, and exploring alternative materials, contractors can mitigate some of the negative impact of tariffs. Stay informed about trade programs and regulatory changes to implement cost-saving measures to further safeguard your business. Adapting to the dynamic trade environment and proactively managing risks will help to ensure the continued success and profitability of construction projects, even in the face of the price pressures and business disruptions that tariffs will introduce. ■
Joe Natarelli www. cbiz. com
Joe Natarelli is Managing Director at CBIZ. CBIZ helps businesses discover new ways to grow with applied industry knowledge, innovative technology, and data-driven insights that inspire greater possibilities. Unlock funding, empower projects, and reveal powerful tax incentives with CBIZ’ s specialized solutions for the construction industry.
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