Material Madness: Part Three

Follow us for our five-part investigative series discussing contributing factors to the roofing industry’s current supply chain challenges. We have researched the issues and will spend several weeks highlighting the circumstances affecting material shortages and price escalations.

Part Three

Tariffs

The current and past president of the United States have both profoundly impacted trade. President Trump imposed new tariffs on steel, aluminum, and a variety of imports. President Biden has replaced the tariffs on European steel and aluminum with a tariff quota system and has kept in place the tariffs for other countries, including China. These actions have created tremendous upward pressure on pricing.

The tariffs, in turn, caused consumers to look within North America for solutions to steel. SVP Josh Kelly of OMG Roofing Products, one of the largest suppliers of fasteners, drains, and adhesives, commented in a roofing town hall:

It really shut down the supply of steel coming into the United States – especially from China, which is producing over 50% of all the world’s supply of steel. What happened, as a result, is people who were getting steel from China started to source their steel in North America. There wasn’t enough capacity. Those supply chains got pushed out, and availability became difficult, everything kind of went wrong, that happens when supply goes down and demand goes up.

The Wall Street Journal, citing the St. Louis Federal Reserve, offered the chart below that illustrates the increase of costs:

Current domestic and global politics do not suggest relief of these costs coming any time soon.

References:

Roofing Industry Leaders Discuss Supply Chain Issues

https://www.roofingexteriors.com/print/924

High Steel Prices Have Manufacturers Scrounging for Supplies

https://www.wsj.com/articles/high-steel-prices-have-manufacturers-scrounging-for-supplies-11631698202?mod=article_relatedinline