MBI Issues Policy Position on Tariffs and Their Impact on Modular Construction

On behalf of the international modular construction industry, the Modular Building Institute  (MBI) strongly opposes the imposition of tariffs on prefabricated buildings, construction materials, and related components. Tariffs increase the cost of construction, reduce affordability for housing, and hinder the growth of a sustainable and efficient building sector. We advocate for free trade policies that support economic growth, innovation, and the global exchange of goods that are critical to the advancement of the construction industry.

Impact of Tariffs on Construction and Material Costs

Tariffs on essential construction materials such as steel, lumber, aluminum, and mechanical systems directly raise costs for manufacturers, developers, and consumers. The modular construction industry relies on a global supply chain to source quality materials efficiently. Artificially inflating prices through tariffs disrupts this supply chain, leading to higher project costs and delays in delivery.

Rising Costs and the Impact on New Construction

The construction industry is already facing significant cost pressures due to inflation, labor shortages, and supply chain disruptions. Tariffs further exacerbate these challenges by increasing the price of raw materials and prefabricated components used in modular construction. These cost increases ultimately translate to higher project expenses, making new construction less viable for healthcare, housing, and schools.

Negative Effects on Affordable Housing

Modular construction has emerged as a key solution to the global affordable housing crisis due to its cost efficiency, speed, and sustainability. However, tariffs on essential materials erode these benefits by driving up production costs. Higher material costs result in increased housing prices, reducing accessibility for low- and middle-income families. Tariffs, therefore, contradict efforts to expand affordable housing supply and alleviate housing shortages worldwide.

Support for Free Trade and Economic Growth

Free trade policies enable modular construction companies to procure materials and components at competitive prices, fostering efficiency and innovation. Removing trade barriers allows the industry to maximize its productivity, enhance housing affordability, and contribute to job creation in both manufacturing and construction sectors. A tariff-free approach encourages international cooperation and investment, strengthening the modular construction industry globally.

Conclusion

The Modular Building Institute urges policymakers to reconsider tariff policies that negatively impact the construction industry. By advocating for free trade, we support a resilient and competitive industry that delivers high-quality, cost-effective, and sustainable housing solutions. We call on governments to prioritize policies that reduce construction costs, promote innovation, and ensure the continued growth of the construction and manufacturing sectors.