14-03-2025
Hawaii officials preparing for tariff effects on construction
HONOLULU (KHON2) — State officials are closely monitoring the potential local impacts of tariffs, especially on construction.
The Department of Accounting and General Services said some projects may have to reduce their scope to stay on budget.
How tariffs could impact Hawaii
DAGS' budget for current projects in design is about $1.8 billion and that budget can not change, but costs will have to be cut if if national-level tariffs increase the price of local goods.
'So always our first choice when we have to cut costs is to cut the scope of the project. Typically, our projects are sized to provide the spaces necessary to provide services to the people of Hawaii,' said DAGS Public Works administrator Gordon Wood.
The director of DAGS said tariffs on steel and aluminum could have the most severe impact on local construction — especially projects that are not yet in the construction phase.
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It is not clear when prices could spike.
'That's a really great question. I think that's the billion dollar question, right. As it relates to tariffs and how it's going to impact us. We simply don't know. Right? Because until something is finalized and, you know, the tariffs are either in play or they're not in play, really speaks to that question,' said DAGS comptroller Keith Regan.
Supporters of the Trump Administration policy argue that tariffs would be reciprocal and an example of fair trade.
What are tariffs and how do they work?
'So what you charge us, we'll charge you. That's fair trade. If they want it to be free trade, which would be ideal for everyone, then they should remove their tariffs on us,' said House Minority Floor Leader Rep. Diamond Garcia. 'Foreign companies from across the globe is now moving to America to invest and build and operate. That's good for America's economy.'
DAGS added that planned, large-scale projects like a new prison on Oahu and a new Aloha Stadium will require a lot of metal products and it is a wait-and-see game to learn about impacts on those.
'We're already struggling with the budget on that and there's going to be a lot of steel there,' Wood said, 'even the new stadium there will be a lot of steel and so as the prices of materials go up, that stadium is going to get smaller.'
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'There's a track record. President Trump served for four years previously and he implemented tariffs and the economy did not suffer the way that the media currently is painting it out to be,' said Rep. Diamond Garcia.
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