Countervailing Duties May Push Up Prices for Softwood Construction Lumber

A November 25 petition by U. S. softwood lumber producers Weyerhaeuser and Potlatch, together with the Carpenters Industrial Council, seeks imposition of countervailing duties on Canadian softwood imported into the U. S. following expiration of the one year standstill agreement between Canadian and U. S. trade officials. The U. S. companies and the carpenter’s union assert that Canadian softwoods are being sold in the U. S. below cost. Canada’s BC Lumber Trade Council opposes the petition. Council President Susan Yukovich says, “The claims levelled by the U. S. lumber lobby are based on unsubstantiated arguments.”

Negotiations between the Obama administration and Canada’s Trudeau government have failed to produce a new bilateral trade agreement after a year of discussion. It seems unlikely that an incoming Trump administration, with its protectionist sentiments, would take any action to prevent softwood lumber price increases which will follow imposition of the countervailing duties proposed by U. S. lumber interests. Look for American housing and smaller commercial construction prices to go up as a result, in the near future.

Will “Buy American” Infrastructure Legislation Launch US/Canada Trade War?

President Elect Trump’s sentiment favoring the preservation and repatriation of U. S. manufacturing jobs at all costs, coupled with growing protectionist sentiment among Democratic leaders in Congress, could result in U. S. motorists and taxpayers getting far less infrastructure actually built under any 10 year federal infrastructure legislation likely to be introduced during a Trump administration’s first term. Ohio Congressman and minority leader candidate Tim Ryan is already a chief cheerleader for the expected “Buy American” riders Congress is likely to add to any Trump administration infrastructure proposals. “Let’s have Buy American provisions in there, so it’s American-made steel and American-made concrete,” Ryan has announced.

Former George W. Bush administration trade representative Susan Schwab says the addition of buy American riders to an infrastructure bill will end up with the federal government spending an extra $900,000.00 for every U. S. steel industry job saved, instead of leaving motor fuel tax revenues in the Highway Trust Fund to build more roads and bridges using American construction workers. Buy American steel provisions hurt U. S. trade relations with Canada under the Obama administration, and the addition of concrete to such legislation would further increase material prices by limiting imports of Portland cement from Mexican and South American suppliers who are major exporters to the U. S. construction market.

Toronto based IPEX Management Inc., a steel product maker with plants in both Canada and the U. S., cites difficulties arising at U. S. military and other construction sites under the Obama buy American restrictions. IPEX’s Veso Sobot says multiple projects have suffered schedule delays and increased costs as a result, hurting workers on both sides of the U. S./Canadian border. “Canada is joined at the hip with America. We get 95% of our raw materials from the U. S. We have a lot of American suppliers. We have a lot of American customers. We share so many things,” Sobot said.

It remains to be seen what specific materials may be included in buy American riders to a Trump administration infrastructure bill, and what the impact on material costs for private construction projects in this country might be.

Federal Court Blocks Enforcement of Labor Advice Disclosure Rule

November 16 U. S. District Judge Sam R. Cummings of the Northern District of Texas in Lubbock issued a permanent injunction blocking the U. S. Department of Labor from enforcing its new rule promulgated March 24, which would have required lawyers and other consultants providing advice to employers regarding opposition to union representation of their employees to publicly disclose their involvement. Judge Cummings ruled that the regulation was an unconstitutional infringement of the employers’ first amendment right to hire and consult with lawyers about labor law matters.

The American Bar Association and the National Federation of Independent Businesses had opposed enforcement of the rule. The ABA specifically objected that the Labor Department rule was interfering with attorney-client privilege. Judge Cummings rulings were issued in the case of National Federation of Independent Businesses v. Perez,  5:16–CV-066-C.

Infrastructure Construction in a Trump Administration

Rosy predictions of doubled federal support for infrastructure construction across our nation under President Elect Donald Trump are fading quickly, according to a recent post on Trump’s transition website. Despite predictions of Trump supporters Wilbur Ross and Peter Navarro that his public private partnership based infrastructure funding and tax plan “could help finance up to a trillion dollars’ worth of projects over a ten year period,” the most recent transportation and infrastructure post on the official Trump administration transition website, https://www.greatagain.gov/policy/transportation-infrastructure.html proposes federal investment of only $550 billion over the ten year period.

Rebar Prices Headed Up After USITC Ruling

The prices of reinforcing steel for highway and other concrete construction projects will likely head up in the new year, following the U. S. International Trade Commission’s November 3 ruling that imports from Japan, Taiwan and Turkey are being dumped in the U. S. by these foreign steel producers. According to the ruling, the $854.1 million in foreign rebar imports represent almost 20% of U. S. reinforcing steel consumption.

Expect countervailing import duties on foreign rebar to be imposed early next year, leading to increasing prices on both foreign and domestic reinforcing steel products in February or March 2017.

PNC Bank Lends $51.3 Million for South Loop Apartment Tower

PNC Bank is providing the $51.3 million construction loan for construction of a $70 million, 26 story, 320 unit apartment building at 1136 Douth Wabash in the South Loop neighborhood. PNC says it is comfortable making the loan after the developer paid off a $70 million construction loan earlier this year on the 351 unit Arkadia Tower apartment complex in Greektown. The Wabash project is being built by Lendlease.

Federal Court Injunction Blocks Enforcement of “Fair Pay and Safe Workplace” Regulation

Texas federal judge Marcia Crone has issued a preliminary injunction blocking enforcement of the Obama administration’s labor regulation which would have required contractors, and eventually subcontractors, to publicly disclose alleged violations of 14 federal labor, safety, health and employment rules, and related state laws, before seeking federal contracts worth more than $500,000.00 after April 25, 2017. According to Judge Crone’s opinion “The public disclosure and disqualification requirements being imposed on federal contractors and subcontractors are nowhere found in or authorized by the statute on which [the rule and Labor Department guidance] relies.”

The lawsuit challenging the rule was brought by the Associated Builders and Contractors and the National Association of Security Companies, while the rule was supported by the Laborers International Union of North America.