US construction goods could face tariffs in the UK as the government grapples with how to respond to Donald Trump’s 10 per cent import tax.
It comes as share prices of some major construction firms dived on Friday (4 April).
The Department for Business and Trade has released an indicative list naming a swathe of building materials that could be hit.
Items in the scope of tariffs include bricks, ceramic constructional goods including sinks and toilets, steel, glass, pipes and fused silica.
Business Secretary Jonathan Reynolds said he wanted companies to respond to a four-week consultation to help shape his department’s response.
“The best interests of British business has shaped our approach throughout as we prepare for all scenarios, which is why we are asking them for their views on how these tariffs impact their operations and day-to-day lives,” he said.
Meanwhile, share prices of several listed construction firms took a hit on Friday as the markets reacted to the US President’s actions, pushing the overall FTSE100 down by 1.65 per cent.
Balfour Beatty’s share price was down by 2.4 per cent, as of 10.30am. It has fallen 5.19 per cent this week.
Ground engineering firm Keller, which is listed in London but carries out most of its work in the US, saw its shares drop by 1.58 per cent.
Morgan Sindall’s share price was down by 1.8 per cent, while Costain’s fell 3.17 per cent.
However, Kier’s remained largely unchanged, while housebuilders Berkeley Group and Redrow made gains.
Travis Perkins, whose price dropped by more than 13 per cent after it reported huge losses on Tuesday (1 April), began to rebound by 1.66 per cent on Friday.
Bloom Building Consultancy director Gareth Belsham said the direct impact of the tariffs would be modest, as the UK does not export many construction materials to the US, but they would affect investor sentiment.
“While the direct impact of US tariffs on UK construction will be modest, their chilling effect on business sentiment is real,” he said.
“Boards worrying about a possible recession later this year need a very good reason to sign off on a big capital investment right now.”
RSM UK partner James Hawksworth said the impact of the tariffs is complex but advised companies to ensure they have an “in-depth understanding of their supply chain” so they can try to work out where costs might increase.
Elsewhere, equipment manufacturer JCB announced plans to double the size of a factory under construction in San Antonio, Texas, as it expects to be hit by tariffs.
Its original plan for a 46,450 square metre factory has been changed to 92,900 square metres.
JCB chief executive Graeme Macdonald said: “In the short term, the imposition of tariffs will have a significant impact on our business. However, in the medium term, our planned factory in San Antonio will help to mitigate the impact.
“We are thankful that the tariff is only 10 per cent and we can only hope that the UK government will conclude negotiations on a trade deal in the coming days and weeks.”