Economists in Colorado are raising concerns that tariffs on steel, aluminum, and other construction materials will lead to higher home prices and job losses. The tariffs, reinstated in March by President Trump, are expected to disrupt the state's already strained housing market and impact small businesses in the construction sector.

“We’re concerned with any policy that disrupts predictability in the market or increases the cost of doing business,” said Loren Furman, President and CEO of the Colorado Chamber of Commerce. “Tariffs could seriously interfere with our work to improve competitiveness and the broader economy.”

Tariffs were first implemented in 2018 but have now been expanded to cover a wider range of products. Builders are already feeling the impact, as material costs have surged, driving up home prices. Experts warn that smaller contractors may struggle to absorb the higher costs, with some possibly losing business.

Keith Maskus, a CU Boulder Professor of Economics Emeritus, shared his concern: “People in Colorado will experience an increase in the cost of living, there’s no question about it.”

Tariffs on steel and aluminum are also expected to affect sectors like agriculture, with prices rising for essential machinery and equipment.

Despite these negative effects, some in the industry, like Steve Swinney, CEO of Kodiak Building Partners, view the tariffs as a necessary evil to help stabilize the housing market. “The short-term is really uncertain, but I think [the tariffs] are ingredients of what we’ve got to do to get longer-term rates down,” he explained.

With construction costs rising, Swinney predicts that home prices could increase by 2.5% in the long run. However, he stresses that the primary affordability issue in Colorado is tied to high interest rates and regulatory costs. He believes that addressing these long-term factors will be essential for improving housing affordability.

As the tariffs continue to affect prices, businesses like Kodiak Building Partners are adjusting by managing their inventory carefully and staying agile in response to shifting market conditions.

Tariffs on steel and aluminum are a contentious topic, but the debate continues to highlight the complex balance between fostering domestic industries and ensuring affordable housing for Coloradans.

Originally reported by Andrea Teres-Martinez in Summit Daily.