PORTLAND, Ore. — Oregon’s construction companies are bracing for the impact of tariffs as threats from Washington D.C. continue to disrupt the industry. While the looming tariffs are a significant concern, local construction companies face several other challenges that are adding to the financial strain.

Three key factors are currently working against local construction businesses, creating a perfect storm of difficulty. First, the ongoing tariff war between the U.S. and neighboring countries, Canada and Mexico, is driving up the prices of essential materials. In addition, the Trump administration’s stance on immigration and the threat of deportation is further complicating matters, particularly for the predominantly immigrant construction workforce in Oregon. Third, the residual effects of the massive Southern California wildfires continue to disrupt the supply chain, compounding the difficulties for local businesses.

Mike Salsgiver, CEO of the Associated General Contractors of Oregon, explained how tariffs are exacerbating the situation. “What it typically does is raise the price of aluminum, steel, lumber, and other materials that our industry relies on to do its work,” he said. These price hikes are not limited to residential buildings alone. Road and bridge projects are also seeing increased costs, with essential materials now priced higher due to the tariff war.

For instance, the cost of the Interstate Bridge replacement project, originally estimated to be between $1.5 and $2 billion, could skyrocket to as high as $9 billion if the tariff situation continues. "If things don’t go well, that project could go up to $9 billion," Salsgiver stated, reflecting the severe financial pressure on infrastructure projects.

In addition to material costs, the crackdown on immigration policies has sparked significant concerns among local contractors. "We are very concerned about massive disruptions in our workforce," said Salsgiver. "A lot of the time, projects get delayed because we don’t have the people to do the work. Anything that would disrupt the workforce right now would be a very serious problem for us." The combination of immigration policy and workforce shortages poses a substantial threat to the timely completion of construction projects.

Residential builders in Oregon are feeling the strain as well. Preston Korst, Director of Government Affairs for the Homebuilding Association of Greater Portland, expressed similar concerns. "The last thing we need right now is more tariffs or any type of tariff that will make it more expensive to build," Korst said. The Pacific Northwest is already grappling with a housing deficit, and the added challenges of tariffs and workforce shortages are driving up construction costs for homebuilders.

Korst noted that the cost of the tariffs could add anywhere from $7,000 to $10,000 per home, a significant increase that homebuilders cannot afford, especially in an already strained housing market. “That is effectively over night for those who are planning to build in our region,” he added.

While President Trump had initially threatened to raise tariffs on Canadian imports to 50%, he has backed off that promise. However, a 25% tariff on certain Canadian goods will still go into effect at midnight, adding further uncertainty to the construction industry. Local businesses are left to navigate the rising material costs and workforce issues as they continue to deal with the ripple effects of these federal decisions.

As the construction industry in Oregon faces these challenges, the long-term impacts on both large infrastructure projects and residential construction could be significant, potentially delaying projects, raising costs, and worsening the region’s housing shortage. The industry’s ability to adapt to these pressures will be crucial in determining the speed at which construction can continue in Oregon.

Impact on the Broader Economy and Future Outlook

The broader impact of these construction-related challenges is expected to ripple across Oregon’s economy. As the cost of construction increases, developers may scale back or delay projects, which could hinder the state’s economic growth, particularly in the residential housing sector. Rising housing costs will likely exacerbate the already existing housing affordability crisis in the region.

In response to these challenges, industry leaders are calling on federal and state officials to address the issues head-on. "We need to find solutions that address both the material cost issues and the workforce disruptions caused by immigration policies," said Salsgiver. "If we can’t address these issues, it’s going to be difficult for the industry to stay afloat, and that could have far-reaching effects on the economy at large."

As the situation continues to evolve, construction companies, particularly those in Oregon, are preparing for the ongoing turbulence brought on by tariffs, workforce shortages, and supply chain disruptions. The industry’s resilience will be put to the test in the coming months, as it faces not just the immediate pressures of tariff-related cost increases but also the long-term challenges posed by a strained labor market and an uncertain regulatory environment.

Originally reported by Spencer Schacht in KPTV.