February 23, 2025 • 33 mins
What if tariffs could shape the future of home building and redefine the housing market landscape? Tune in to the Carolina Contractor Show as we, your hosts Donnie Blanchard and Eric Smith, unravel the complex web of tariffs and their surprising effects on the construction industry. With our signature humor, we kick off with a nod to the tariffs set by Donald Trump, before steering into how these trade policies have impacted the cost of materials like lumber, concrete, and bricks. Discover how reciprocal tariffs might just be the hidden "tax" on consumers and why knowing the origins of your building materials can be a powerful tool for navigating market shifts.
Get ready for a deep dive into the unexpected economic ripples that tariffs create in both local and national contexts. From the nuances of cost-plus contracts to the potential rise of resale homes due to escalating building costs, we cover it all. We also explore the political chess game behind tariff decisions, offering insights from influential figures like Elon Musk on fiscal responsibility and economic strategies. Join us as we discuss the implications of these fiscal policies and the societal reactions they provoke, setting the stage for a broader understanding of how tariffs impact more than just the bottom line.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to the Carolina Contractor Show with
your host, general ContractorDonnie Blanchard.
This just in, donnie.
Donald Trump has put a tariffon our show.
Speaker 2 (00:11):
Oh my gosh, I didn't see that coming.
Speaker 1 (00:14):
I didn't either.
He's doubled it from 0% to 0%.
Speaker 2 (00:17):
Nice.
Well, since we don't make moneyfor it, that makes sense.
Speaker 1 (00:20):
Yeah, I guess that's good for the listener.
We will not pass the cost on toyou.
We'll actually pass the savingson down to the listeners and
viewers of the CarolinaContractor Show.
My name is Eric Smith andthat's a hint at today's topic
on the show.
But first hit the website,thecarolinacontractorcom.
We've got links on the YouTubesite because we're basically
models, so we don't want peopleto be feeling overwhelmed by
(00:51):
that, so we have filters thatmake us look like we're in our
40s or 50s.
You can also listen to pastshows with a podcast format.
You can download them.
We've got literally hundreds ofepisodes you can check out
based on the date they werereleased or even the subject or
topic they're about.
If you have a question about ashow, if you have an idea for a
show, if you just have a generalquestion about your house, you
can also reach us through thewebsite by clicking on Ask the
(01:13):
Contractor.
That goes to Mr Donnie and heanswers all those questions and
once in a while we get crazy andwe do a whole show of nothing
but questions from listeners.
Now, first of all, let'sexplain who the me and Donnie is
.
My name is Eric Smith.
I do sales for Home BuildersSupply in Wilson Greenville.
I sell two by fours andsometimes pass load nails,
(01:34):
things like that, and Donniepaper or plastic strip.
Speaker 2 (01:39):
I'll go plastic so we can work in this bad weather.
Yeah.
Speaker 1 (01:42):
Yeah, and Donnie, who's over there?
He put the hot and hotgalvanized nails himself.
He is a general contractor,he's the owner of Sure Top
Roofing, he's the owner ofBlanchard Building Company and
he's kind of the brains of theoperation on the looker.
And what we like to do everyday is talk about your house and
building it and constructionand DIY and supplies and things
(02:04):
like that building it andconstruction and DIY and
supplies and things like that.
And today Donnie's idea was totalk about something that's very
topical and that is tariffs.
And I am not an expert ontariffs.
I assume you are not either,donnie.
Speaker 2 (02:16):
No, but I mean, with everything going on in the media
these days you just about haveto be, and with what we went
through a few years ago with thebig time overnight increase in
lumber prices and the cost ofconstruction going up by, you
know, several hundred thousanddollars on a big house, I think
it's definitely a worthy topicbecause if something like that
comes back down the pipe man, wegot to get ready for that.
Speaker 1 (02:37):
Yeah, and it's very fluid, seems every day, maybe
every hour, this administrationmoves so quick on making all
sorts of decisions that thetariff information is constantly
changing.
One minute there's going to betariffs on multiple countries,
and then it's delayed, and thenon the 13th of February, trump,
(03:00):
that is, had the.
What type of tariff?
We were just talking about it,donnie.
Speaker 2 (03:05):
Reciprocal.
Maybe Is that right.
Speaker 1 (03:07):
Yeah, if a country charges us 50% on our stuff,
trump said we're going toimmediately charge the same on
them.
No doubt I think I'm not a proon that.
What do you think on?
What's your gut feeling on areciprocal tariff?
Speaker 2 (03:21):
We might see Chevrolets in Mexico, who knows?
And I think that that is, Ithink it's very fair to say it.
At the very least it's fair,because if he's always a big
proponent of we're, we're alwaysgetting the bad end of the deal
and everybody else, we're,we're padding their pockets and
we feel sorry for them.
We take care of them.
You know, we we have thisupside down tariff equation and
(03:45):
I just think at the very leastit's fair.
Some of these we'll get intothe details, but some of these
may impact us in a negative way.
But I mean, I think, yeah, atthe very least you charge us 50,
we charge you 50.
And that sounds like a squaredeal.
Speaker 1 (03:59):
Yeah, it's a starting point and Trump has always said
he's using it as a bargainingtool, and it worked.
In the first couple of weeks ofhis administration he
threatened tariffs and countriesback down.
When it comes to the big boyscountries we'll be talking about
in today's show China andCanada and Mexico it might be a
little longer to get things towhere we want them, or just we
(04:22):
don't know.
That's why, again, we stresswe're not tariff experts.
But I do want to say one thingWe've seen in politics
politicians on usually one sideof the aisle say we need to tax
those big evil corporationsbecause they make so much money
and help out the little guy, andso they throw taxes on those
corporations.
(04:42):
And the corporations never eatthat tax.
They just charge it to theconsumer and say you're going to
pay this new tax that thegovernment put on us.
So when they complain abouttariffs being a tax on the
consumer, the companies thathave to pay higher costs for
material or services are justgoing to put it on to the
(05:03):
consumer.
That's the same way taxes work.
So when you hear politicianssay tax the big evil
corporations, remember they'resaying tax you, the individual,
the consumer, and tariffs canaffect you the same way,
depending on what a tariff'sgoing to be put on.
But you not only came up withthe idea, donnie, of doing
(05:25):
tariffs, but you wanted to gointo how it affects construction
and home building.
And we've got a few countriesthat we import building
materials from, and I have anidea Most people don't realize
how much of their, let's say, aresidential house is affected by
imports, because they don'tknow where all the materials
(05:45):
come from.
Speaker 2 (05:47):
Yeah, and I'll talk about our neighbors first.
And obviously the big deal twoor three years ago when lumber
shot through the roof, is thatwe put a tariff or the Biden
administration put a big tariffon Canadian imported lumber.
And you know, when you dig alittle deeper there, more than
lumber they provide a lot ofsteel as well, and that makes
sense because they're theneighbor to the north, so it is
(06:09):
something like steel that that'sa lot heavier than a lot of the
other imports.
If you can get it, you know,next door, that's a lot better
than shipping it across theocean.
But you know, wood is wood istheir big thing and we get a lot
of our lumber from Canada andwe get a lot of our lumber from
Canada.
And one of the main things thatI saw three years ago is that
domestic production, of courseit slowed down.
(06:30):
We had labor shortages and halfof that was related to COVID
and half of that was related tobasically not.
They didn't have the workers tofacilitate all the sawmill, so
a lot of people shut down, but alot of that was the price went
up and so, uh, domestic folkswho were, who were making that
(06:51):
stuff stateside, said hey, ifthey're getting paid that, then
I'm going to get paid that, andthat happens across the board.
I think it's going on with eggsright now.
You know the the uh, I watchedsomething earlier and said you
know the the price of eggsshooting up.
It's not because they have lesseggs, it's just they figured
out a way to, you know, producethe eggs.
But it's just the egg suppliersare choosing to make their mint
and I think, as a businessperson, you know you have these
(07:13):
opportunities when you've beenin business for 10, 20 years
where, hey, if I'm going to makemy retirement, now's the time,
and I think that's what happenedthree or four years ago.
But uh, hopefully, hopefully,they work something out and that
, uh, you know there's not aheavier import, uh import tariff
on Canadian lumber, and thenthat won't give the domestic
production the chance to jack uptheir prices as well.
(07:34):
But uh, moving to Mexico, uh,the main thing we get from
Mexico is lime and gypsumproducts.
So basically all the drywall inyour house comes from down
south and I know they have apause.
Is that right?
30 days, something like that.
Speaker 1 (07:55):
Yeah, it was going to take effect right as his
administration started, or inthe beginning of February, and I
think it's now beginning ofMarch.
Speaker 2 (07:58):
Yeah, and I think his focus probably isn't on
building materials, and so Idon't know how that works.
If you put a tariff on um,gypsum or drywall for this
amount, can you do somethingdifferent on automobile
production?
But, um, anyway, hopefully youknow that stays calmed down
because it's all part of a bigperfect storm.
And if you, you, you know youcan do it on the things that
will help us and not on thethings that will hurt us, then
(08:20):
that's the end game.
But in China I was surprisedthat we get, we get steel from
them.
I didn't think it would be goodto ship that, you know, I guess
, to across two seas or twooceans, but anyway we get a lot
of steel from China.
I didn't realize that a lot ofinterior finished products we
get from China anything tech,and that's no secret that they
(08:42):
have the tech, pretty much thewhole tech market locked down
and appliances, everything comesfrom that neck of the woods.
So you know, a tariff onChinese imported products is
going to be a big deal.
And the last one I'll comment onand there's more countries that
we get things from, but theseare the big four is India.
A lot of our tile, the majorityof our tile comes from India.
(09:03):
Solid surface countertopmaterial comes from India.
Solid surface countertopmaterial comes from there,
Construction sand and bricks.
So a lot of the majority ofwhat we use in a single family
residential house is coming fromthat area, and I think the big
thing, or the big takeaway, isthat, all that being said, it
still only equals 7% of thebuilding process, so it's not
(09:27):
like we're importing 30% of ourbuilding products.
So hopefully that's our savinggrace.
Speaker 1 (09:32):
And a lot of people don't realize that a lot of
lumber comes in from Europe too.
It's not just our neighbors tothe north we get it from, like
the Norwegian countries andstuff, but I don't know how.
Like you said, it's not likethe tariff was put on a bunch of
singular items like all rightbathroom tile is going to get
(09:54):
25%.
So I also wonder, with tariffs,if a country is told, hey,
we're putting 25% on your lumber, will they say, well, screw it,
we'll put 25% on everything wesend to you then, or you send to
us, and then everything's beingtariffed.
So I don't know how laserfocused, you can make a tariff
(10:15):
before the other country says,well, we're going to add 20
things onto this list just toscrew you back.
Right, yeah, reciprocal worksboth ways.
Yeah, that's right, and Ithought that was an interesting
point you made.
It sounds horrible, but it isonly 7% of the money, of the
(10:36):
materials.
But people also don't realizewhat's in their houses in
general.
They think it's wood and nails,but they don't think there's
steel in it.
They don't take inconsideration appliances or
things like that.
Speaker 2 (10:49):
That 7% figure is just for residential.
When I looked into it some ofthe numbers didn't add up.
So when you take in thecommercial construction into
consideration it's going to be.
You know those numbers areprobably a lot more weighted
towards commercial thanresidential, but residential at
this point still sitting atabout 7%.
Speaker 1 (11:10):
Yeah, you think of just a small, let's say a
10-story building.
It's going to be a commercialbuilding going in downtown
Burlington or Wilson.
That's a lot of steel, that's alot of concrete, that's a lot
of stone, that's a lot of brick.
The baseball stadium they'rebuilding in Wilson right now is
nothing but steel skeleton andthere's a lot of it.
So that's all going to beaffecting the cost.
(11:33):
That's all going to beaffecting the cost.
And then gut feeling, donnie,as a builder will how do you
quote a price of a house tobuild it when you could have an
astronomical increase on one ofyour main products that you use
to build?
Speaker 2 (11:50):
Oh gosh, that's the.
That's a loaded questionbecause I don't know how you do
it really.
And I've watched.
I'm a subcontractor with SureTop Roofing so I do the roof
work for several prominentbuilders, you know, from here to
the other side of the state,and I also build houses.
So I see this thing from bothends and I try to pick their
brains and I say, hey, how areyou guys doing it?
(12:10):
Are you doing cost plus only?
And I think, from a builderstandpoint, the only way that
you can cover your rear end isto either charge the homeowner
on a contract price enough tocover you If you do have a 30,
40% increase between the timeyou sign the contract and the
time you actually need thematerials or you do a cost plus
and 90% of these guys are allresorting to cost plus.
(12:32):
And that gets kind of hairybecause banks don't want to hear
that.
Banks want a contract price.
But you know, with everythingbeing so volatile now, I don't
know how anybody does that andsleeps at night because it's
just it could change.
Like you mentioned, that wedon't know with this tariff
conversation if this is going tobe different next week and
these guys are thinking thatexact same thing and you think
(12:53):
about certain items when yousign a contract.
You pull a permit, you dig afooting and so you've got the
concrete there, you've got thebricks for the foundation, then
you've got the lumber, which themajority of the lumber you use
in the first two months of abuild.
So you'll have floor system,walls, rafters.
The plywood's a biggie becauseit covers the roof and the
(13:16):
sidewalls and the floor, butit's, you know, you're talking
seven 16th OSB versus threequarter inch plywood.
Right, I would say those are asafer bet than things that come
later in the process, becauseyou know you, you can pad
yourself a little bit on thoseand and hopefully be okay.
But, um, in all fairness, that'swhat burned a lot of people,
but they were $50,000 over onthe framing budget on a 3,000,
(13:37):
4,000 square foot house, and soI know I'm not giving you, I'm
doing a political answer here.
I sound like I'm running foroffice for a construction
position, but no, it's one ofthose things where cost plus it
seems to be the new norm andbanks a few banks are becoming a
little more friendly to it.
But I think, from a with abuilder homeowner relationship,
(13:58):
if that builder says, hey, youknow we may have to have an
amended contract.
We'll do a contract for thebank, but we're going to do an
amendment to the contract beforewe get started.
That's not out of the ordinarynow.
Speaker 1 (14:08):
Yeah, and I guess also the good news is, when you
are building a house, once youstart on the foundation and you
put down your block and yourbrick and if you're pouring
concrete slabs of some way, thathappens so quick it's not like
you price it and it'll be a yearbefore you get to that part,
versus the inside of the house,or roofing, and I don't think
(14:30):
shingles.
It did make me wonder, becausethe main boys produce them
pretty much in the country,don't they?
Speaker 2 (14:38):
Oh, gosh, that is a deep, deep rabbit hole with the
shingles, sort of like concrete.
Okay, and I'll get back to theshingles.
But the concrete, you may makethe concrete here, but the sand,
like I mentioned, the majoritycomes from India.
The lime, the majority comesfrom Mexico and we just don't
have the natural resources to umto to fill the demand for
concrete.
So they may make the concreterecipe here, but all the
(15:01):
resources for that concrete comefrom other places.
Same with the fiberglass mat,with the shingles, uh, that they
pull in, uh, that from anothercountry, uh, a lot of the
granules or the asphalt that youmentioned, that comes from
another country.
And, depending on the shinglemanufacturer, what I'm seeing
the trend turning to is thatthey are encouraging domestic
(15:21):
production because a lot ofthese guys got burned and they
could not meet the demand whenroofing, you know, went through
a big change a couple of yearsago that they just didn't.
You know we couldn't get.
We could get a black, gray andbrown shingle for about two
years and if you didn't wantthat, then you know, sorry, no
dice, because we couldn't.
There was one manufacturer toget the greens, the reds and the
(15:43):
blues and thank goodness wemade it through that and not a
lot of people wanted the funkycolors, but yeah it it.
This impacts everything.
Speaker 1 (15:50):
Literally, you can bake a cake in your kitchen but
you get all the ingredients fromdifferent places.
Yeah, so even though GAF makesshingles in the US, they've got
several plants strategicallylocated through the states.
They are getting materials tomake them from around the world,
so that can impact it.
So, donnie, I want to call thistariffs for dummies, and again
(16:12):
we're no experts on this, butI'll kind of drop a way.
A tariff could affect the priceor what the reaction to it
could be, through the industryof building and construction,
and then maybe you can give aboots on the ground type of gut
feeling you have.
So we have tariffs put in place.
(16:34):
So we have tariffs put in place.
The first thing people think isthe price going to switch
overnight.
Could we see like a directprice increase right off the bat
?
Speaker 2 (16:45):
Not overnight, but I would say within the year.
Yes, no-transcript.
I think he's smarter than that.
I think the people who areadvising him are smarter than
that and I think that they alljust went through, you know,
even though they're a little bitpolitically protected by being
(17:08):
the powers that be on thisadministration.
So I do know that, I don't know, but intuitively I think that
that would be a bad thing and Iknow that they would want to
avoid that.
Nobody wants that on theirrecord and you know it also.
(17:32):
So many factors.
Where I live I'm right here onthat merged corridor, 40 and 85,
between Greensboro andHillsboro Businesses are coming
left and right.
You know we've got an abundanceof work, but you get off the
beaten path a little bit and Ican't speak for those folks.
And it may be one of thosedeals where you may have to go
towards a bigger city tomaintain the work, and I mean,
(17:54):
that's just how things move andshift, but I'm sure hoping that
the tariffs don't affect it thatway, but overnight I don't
affect it that way.
And but, but overnight I don'tthink so.
Will it be as cheap to buildnext year?
I think that's a supply demandissue, but but at the very least
, what I see is, if it does goup, I think that the housing
(18:16):
market will lean towards resalemore than new builds, so people
want to buy what's already onthe ground.
What you know was what youbuilt for the old housing cost a
couple of years ago will becomethat much more popular, and
then that's going to translateto less inventory.
So, either way it goes, I don'tknow that I have a really
positive forecast on it, but youknow that's what I do for a
(18:36):
living, so I would like to saythat heck, yeah, let's, let's go
, but let's build all you can.
But, um, unfortunately I'm notin control of that part.
Do you worry?
Speaker 1 (18:45):
about not to beat up on Canada, but it's easy, cause
they won't, they'll still bepolite back.
Um, do you worry that theymight go?
Well, fine, we're just gonnaship you a whole lot less, and
then we're back to like whatCOVID was supply issues.
Speaker 2 (19:01):
Well, I think the catch 22 there is that if they
ship a whole lot less, they makea whole lot less money.
So you've got you know who'sgoing to regulate that.
Is the government going to putthe squeeze on them and say you
can only send this many boardfeet per month.
And if we're demanding and ourdemand, our housing demand, is
still high, I think they'll finda way to work around that.
And you know the end game.
And if you've got somebodythat's gung-ho and doesn't want
(19:23):
to see the light at all anddoesn't want to think that, hey,
this could be negative, thenthey're going to say well, you
better domestic, you knowproduction better go through the
roof over here, and statesidesawmills better get their rear
ends in gear.
And that all sounds great, butthere's a lot of moving parts to
make that happen.
Speaker 1 (19:39):
It could become very volatile and it puts a lot of
uncertainty in the market.
So it makes people scared or alittle fearful to maybe pull the
trigger on building something.
And that idea of fear probablycan affect an economy just as
much as any other singular item.
Just as much as any othersingular item because when
(19:59):
people are fearful or scared ofsomething and they stop spending
it spreads like a virus veryquickly and just can shut things
down.
Speaker 2 (20:14):
Yeah, consumer confidence is everything and I'm
going to change hats here andgo to the roofer world.
But you know, if you've got aroof, we preach on the show that
roofing and HVAC are your twobig ticket items that are
guaranteed to wear out.
And if somebody can kick thatcan down the road and they're
not very confident in what'sgoing on in the world, then
that's what they're going to do.
So they may put a Band-Aid onthat roof and try to squeeze an
extra three or four years out.
(20:35):
And you multiply that bythousands of people over
hundreds of cities.
Then all then, you know, all ofa sudden, the, the roofing
industry, shuts down.
And you know, fortunately, we'vebeen really busy and and praise
report since, uh, trump won theelection.
It was almost like the phonestarted ringing overnight, so I
can testify to that then.
And we were busier going intothis winter and thank you to all
(20:56):
for all the support, foreverybody who's a loyal listener
and a new listener, because, uh, people say, hey, we heard your
show and a lot, you know, a lotof people get their consumer
confidence out of what we sayand, uh, you know, I mean we're,
we've got our finger on thepulse with this stuff.
But we went into this winter,I'm pleased to say, with more on
the books than we've had sincepre-covid and um.
You know that's a good thing, Ihope, and we've got a really
(21:20):
exciting show coming up and notto sidetrack here, but hopefully
this runs a lot of the stormchasers out of town.
There's a lot of people who justgo knock on doors.
They're not legit operations.
They use a different crew fromhouse to house to house and you
just don't get the same endresult as using somebody locally
owned and operated who've hadthe same people for years and
years.
(21:40):
So I'm hoping for both sides tobe true.
I hope that the demand stayshigh and I hope for a market
cleansing to get some of theknuckleheads out of here at the
same time.
Speaker 1 (21:49):
Yeah, my wife and I are working the intricacies of a
HELOC, determining, um what wewant to do, because we want to
do home improvements and youknow a roof being one um,
interior stuff, some other smallexterior things like a new shed
, and I see a lot of people comeinto our stores and they have
(22:09):
that same sentiment.
Hey, I feel like I can finallypull the trigger and do this.
I do want to add on the roofers.
I'm not going to give any names, but there's roofers that I've
met through the business thatare the son or grandson of the
founder.
They've been.
I mean, it's generational and Iknow you have generational ties
to construction too, and I thinkthat's a reason why you need to
(22:32):
ask around and ask people hey,who do you recommend, who did
your stuff?
And avoid those.
I'm not saying they're bad, butthe franchises kind of give me
the when it's a national numberand you look in, they're based
in Minnesota or something.
There's a lot of localbusinesses that are generational
(22:55):
.
That's what they've been doingand they're very good at it.
So, ask around, ask suppliershey, who do you recommend to do
painting or brick and block orroofing or something?
Because you tend to find muchbetter workers.
And again the Tommy Tank Topand those guys, they're scary,
chuck in a truck.
Speaker 2 (23:15):
Chuck in a truck.
Thank you, tank Top Tommy.
I love those guys, but not onmy job.
Hey, they're good, they're coolin the bar, but, yeah, not on
the job site I want to go, butnot on my job.
Speaker 1 (23:25):
They're cool in the bar, but not on the job site.
I want to go back to somethingyou mentioned also about wood
mills.
I said, hey, why don't we justcut down our trees and start
doing the wood here?
The impact on domesticproduction it sounds good, but
it would take literally years.
You can't just fire up a plant.
There's a lot of industrieswhere we think we could pick up
the slack, but that's not goingto happen in a year or two years
(23:47):
time Absolutely not.
Speaker 2 (23:48):
No, it's.
That's one of those things with.
You'll need an investor, abusiness plan, a lot of willing
workers.
You know, and like I mentionedwhere I'm living thank God, I'm
so grateful that the economy isbooming around here and
everybody.
There's a huge influx of peoplemoving to the middle third of
the state, but that's not thecase everywhere.
So you need all that to happento have somebody with a big
(24:12):
enough sawmill to meet the localdemand.
And I agree with you 100%,that's not going to happen
overnight.
Speaker 1 (24:18):
And this is the Carolina Contractor Show.
We're talking about tariffs and, as we said at the beginning of
the show, neither Donnie nor Iare economists or tariff experts
, or even amateurs, or evennovices.
But Donnie having boots on theground, I working in the supply
side of it, we do tend to getsome ideas of what's going on.
(24:38):
Before it hits the generalpublic, I will say build now,
it's only going to get moreexpensive.
Stop trying to time the top,the hit the market just right to
get that down point to buy ahouse or build a house.
Just go ahead and geteverything in motion, because
construction costs do go up anddown, but they tend to go up.
(25:00):
And futures, by the way, forlumber soft lumber I looked this
up middle of February was 605and it was higher last year at
618.
So even with the threat oftariffs, futures have not hit a
new high yet.
That could happen and some ofthe indirect effects of a tariff
(25:24):
are businesses that are relianton not necessarily materials,
but your, for example, yourbusiness, uh, and other
businesses might rely onbusinesses like a roofing
company to buy their supplies.
So if you're not buying as much, that affects them.
They don't buy lunch at therestaurant next door.
(25:47):
They don't buy the new car, soa tariff on something unrelated
to your business can affect.
Wow, I think I just went allKamala in a word salad there.
Speaker 2 (25:59):
I was following.
You know, man, it made perfectsense to me.
But yeah, nice analogy.
Speaker 1 (26:02):
The other thing we don't know about, donnie, is
negotiations and policy changes.
This is inside baseball.
That happens in rooms thatwe're not invited to be in.
So I am curious, and maybe youeven have a gut feeling, what's
going on behind the scenes?
When Trump comes out publiclyand says I'm raising a tariff of
25% on these countries andthese materials, and the other
(26:26):
country says something back,what are the handlers in the
rooms maybe actually saying?
Do you even a gut feeling?
Speaker 2 (26:37):
I think he's just a good negotiator and I think he
does a lot of that to make themsquirm.
I think that if he even bringsit up at all, it was because it
was unfair in the first placeand I think another couple of
things that impact what we'retalking about is if we get gas
prices down and we get thisinflation problem handled, then
(26:58):
that puts money back in people'spockets overnight and so, as
long as the tariffs don'texplode, the pricing and it
maybe you ease up.
Just because of a hard-nosednegotiator, I think a lot of
that stuff will balance out orflatline after about a year.
So if we have to go through atough year, at least the cost to
(27:18):
once it gets here to ship itaround the country with from the
gas prices being low and people, you know, not paying an arm
and a leg for groceries and allthe other things that are
impacted by inflation.
As long as he can fix those two, you know, and we don't know
what's going to happen with thetariffs, but I think it's going
to be a big balancing act and ifI had to be a fly on the wall
in that room you just mentioned,I would say that that probably.
(27:40):
That's probably the approachthat they're taking, because,
like I mentioned I don't know 10, 15 minutes ago in the show
that they're too smart for that.
They don't want a housingcrisis on their hands.
And I and and the big picturewe're finding all this
government spending that's beenout of control and I mean we
could do a whole nother show onthat.
But I'm blown away by whatwe've been spending money on and
what the Doge folks haveuncovered in the last just in
(28:02):
two weeks.
I don't think anybody's madethis much progress in just a
short amount of term with thenew administration as these guys
have.
So my hat's off.
Things are good, things aregood.
Now I'm going to keep prayingabout it and keep an optimistic
outlook and, um you know,hopefully we can come back and
revisit this topic in a in acouple months and all will be
well.
Speaker 1 (28:21):
I would love to do a Doge show and maybe we can get
Elon Elon who, by the way weknow listens to the show um, get
him on.
But I was just talking to themissus today.
Yep, um, you know how.
They're finding a billion here,500 million there, 10 million
over here misspending.
(28:49):
They started looking intoMedicare, medicaid, and Musk put
out on X.
He said it's somewhere, wethink, between 1.7 and 2.1
trillion in misspending onMedicare and Medicaid, dod and
IRS.
And I said several months ago,if you could have Elon Musk and
or Jeff Bezos, the Amazon guy,use their influence and I don't
mean this in a sinister way, butto streamline certain things,
(29:09):
like they say, yeah, we'll haveit there tomorrow they should be
able to process DMV and taxesand Medicare, medicaid payments
and security payments and thingslike that at a much more
efficient rate.
And you probably even saw thatthing in the caves where they
(29:32):
process federal governmentpensions and stuff they send it
down in the big cave and file itaway and it's all paper.
Speaker 2 (29:39):
It's nothing electronic about it.
And yeah, I just heard aboutthat today and I'm blown away by
the people who are opposed tothis.
People are actually upset aboutthis and I'm thinking you guys
are drinking the wrong Kool-Aid.
You have been and you're indenial even still, and I don't
understand, with our nationaldeficit, who wouldn't be happy
about what's happening right nowBecause deficit?
Who wouldn't be happy aboutwhat's happening right now
(29:59):
Because we're trimming?
Speaker 1 (30:00):
the fat on another level.
And one more thing, because Iknow people like to hear this
and you just started winding meup and run out of time.
You notice how, when Trumptalked about how they'll rebuild
Gaza, and what I noticed is thebig giant campus college
protest and the 50,000 peoplewalking down the street
(30:20):
protesting it and saying no haskind of evaporated.
And it hit me, it's becausethey were paid and I guarantee
it was USAID money that came inand paid these people, because
the protest have pretty muchvaporized about everything of
Trump.
You'd think they'd have 10,000people in every single campus.
No, they got like one inWashington DC and it was like 50
(30:42):
people was the protest and halfof them were congressmen.
Speaker 2 (30:46):
Did you see that the budget for USAID was bigger than
all the CIA, the FBI, all thefederal agencies that you hear
about all the time combined?
They had more money to workwith than they did.
So you know, I think that theysaid that they I heard it worded
today that they attacked thecentral nervous system for the
deep state and, um, I mean, thattakes some guts, man, but
(31:08):
somebody had to do it and andI'm just glad that that we got
somebody who's willing to pushforward.
They're not worried aboutanything, uh, reputation wise,
and they're.
They're pulling the curtainback on the real bad guys.
Speaker 1 (31:19):
Yep, you see Elon Musk pick up a gold phone and
say get me big balls.
And then, if you're not surewhat that is, you need to look
into it.
But to wrap up, the topic oftoday's show was about tariffs,
and the consensus is that, whiletariffs are intended to protect
domestic industries, they canresult in some higher consumer
prices, and that's going to beparticularly in industries like
(31:42):
construction and home building,which is what is heavily relying
on imported materials likelumber and, as you pointed out,
donnie, where we get metal,where we get tile, where we get
gypsum, where we get lime.
A lot of people think that weproduce all that stuff in-house
in the United States.
We don't.
So the exact impact is going tobe based on a lot of factors,
(32:03):
and fear is one of those.
I'm with you, donnie.
I think the shock will start tolevel off as we go through the
next few weeks and months andthen, if there is any effect, I
think they'll work their way out.
My gut says we're not going tosee these massive price
increases.
Some, some things will, andthat'll affect overall prices of
(32:24):
housing.
But again, I don't think youwait to build a house.
If you want to build or buy.
Speaker 2 (32:29):
just start doing it now yep, full agreement, man,
full agreement, good points good.
Speaker 1 (32:33):
Well, I hope you like this amateur take on tariffs
and how it affects the economy.
But eventually we all feel itin different ways, whether it's
the price of eggs literally, orthe price of drywall and metal
roofing and all that other stuff.
But we'll put the show up onthe website in podcast form and
the website address isthecarolinacontractorcom and
(32:54):
we're thankfully tuned in.
We thank you for the supportand we hope to hear and see you
again next week on the CarolinaContractor Show.
Have a great day everybody.
Thanks for listening to theCarolina Contractor Show.
Visit thecarolinacontractorcom.
Welcome to the Carolina Contractor Show with
your host, general ContractorDonnie Blanchard.
This just in, donnie.
Donald Trump has put a tariffon our show.
Speaker 2 (00:11):
Oh my gosh, I didn't see that coming.
Speaker 1 (00:14):
I didn't either.
He's doubled it from 0% to 0%.
Speaker 2 (00:17):
Nice.
Well, since we don't make moneyfor it, that makes sense.
Speaker 1 (00:20):
Yeah, I guess that's good for the listener.
We will not pass the cost on toyou.
We'll actually pass the savingson down to the listeners and
viewers of the CarolinaContractor Show.
My name is Eric Smith andthat's a hint at today's topic
on the show.
But first hit the website,thecarolinacontractorcom.
We've got links on the YouTubesite because we're basically
models, so we don't want peopleto be feeling overwhelmed by
(00:51):
that, so we have filters thatmake us look like we're in our
40s or 50s.
You can also listen to pastshows with a podcast format.
You can download them.
We've got literally hundreds ofepisodes you can check out
based on the date they werereleased or even the subject or
topic they're about.
If you have a question about ashow, if you have an idea for a
show, if you just have a generalquestion about your house, you
can also reach us through thewebsite by clicking on Ask the
(01:13):
Contractor.
That goes to Mr Donnie and heanswers all those questions and
once in a while we get crazy andwe do a whole show of nothing
but questions from listeners.
Now, first of all, let'sexplain who the me and Donnie is
.
My name is Eric Smith.
I do sales for Home BuildersSupply in Wilson Greenville.
I sell two by fours andsometimes pass load nails,
(01:34):
things like that, and Donniepaper or plastic strip.
Speaker 2 (01:39):
I'll go plastic so we can work in this bad weather.
Yeah.
Speaker 1 (01:42):
Yeah, and Donnie, who's over there?
He put the hot and hotgalvanized nails himself.
He is a general contractor,he's the owner of Sure Top
Roofing, he's the owner ofBlanchard Building Company and
he's kind of the brains of theoperation on the looker.
And what we like to do everyday is talk about your house and
building it and constructionand DIY and supplies and things
(02:04):
like that building it andconstruction and DIY and
supplies and things like that.
And today Donnie's idea was totalk about something that's very
topical and that is tariffs.
And I am not an expert ontariffs.
I assume you are not either,donnie.
Speaker 2 (02:16):
No, but I mean, with everything going on in the media
these days you just about haveto be, and with what we went
through a few years ago with thebig time overnight increase in
lumber prices and the cost ofconstruction going up by, you
know, several hundred thousanddollars on a big house, I think
it's definitely a worthy topicbecause if something like that
comes back down the pipe man, wegot to get ready for that.
Speaker 1 (02:37):
Yeah, and it's very fluid, seems every day, maybe
every hour, this administrationmoves so quick on making all
sorts of decisions that thetariff information is constantly
changing.
One minute there's going to betariffs on multiple countries,
and then it's delayed, and thenon the 13th of February, trump,
(03:00):
that is, had the.
What type of tariff?
We were just talking about it,donnie.
Speaker 2 (03:05):
Reciprocal.
Maybe Is that right.
Speaker 1 (03:07):
Yeah, if a country charges us 50% on our stuff,
trump said we're going toimmediately charge the same on
them.
No doubt I think I'm not a proon that.
What do you think on?
What's your gut feeling on areciprocal tariff?
Speaker 2 (03:21):
We might see Chevrolets in Mexico, who knows?
And I think that that is, Ithink it's very fair to say it.
At the very least it's fair,because if he's always a big
proponent of we're, we're alwaysgetting the bad end of the deal
and everybody else, we're,we're padding their pockets and
we feel sorry for them.
We take care of them.
You know, we we have thisupside down tariff equation and
(03:45):
I just think at the very leastit's fair.
Some of these we'll get intothe details, but some of these
may impact us in a negative way.
But I mean, I think, yeah, atthe very least you charge us 50,
we charge you 50.
And that sounds like a squaredeal.
Speaker 1 (03:59):
Yeah, it's a starting point and Trump has always said
he's using it as a bargainingtool, and it worked.
In the first couple of weeks ofhis administration he
threatened tariffs and countriesback down.
When it comes to the big boyscountries we'll be talking about
in today's show China andCanada and Mexico it might be a
little longer to get things towhere we want them, or just we
(04:22):
don't know.
That's why, again, we stresswe're not tariff experts.
But I do want to say one thingWe've seen in politics
politicians on usually one sideof the aisle say we need to tax
those big evil corporationsbecause they make so much money
and help out the little guy, andso they throw taxes on those
corporations.
(04:42):
And the corporations never eatthat tax.
They just charge it to theconsumer and say you're going to
pay this new tax that thegovernment put on us.
So when they complain abouttariffs being a tax on the
consumer, the companies thathave to pay higher costs for
material or services are justgoing to put it on to the
(05:03):
consumer.
That's the same way taxes work.
So when you hear politicianssay tax the big evil
corporations, remember they'resaying tax you, the individual,
the consumer, and tariffs canaffect you the same way,
depending on what a tariff'sgoing to be put on.
But you not only came up withthe idea, donnie, of doing
(05:25):
tariffs, but you wanted to gointo how it affects construction
and home building.
And we've got a few countriesthat we import building
materials from, and I have anidea Most people don't realize
how much of their, let's say, aresidential house is affected by
imports, because they don'tknow where all the materials
(05:45):
come from.
Speaker 2 (05:47):
Yeah, and I'll talk about our neighbors first.
And obviously the big deal twoor three years ago when lumber
shot through the roof, is thatwe put a tariff or the Biden
administration put a big tariffon Canadian imported lumber.
And you know, when you dig alittle deeper there, more than
lumber they provide a lot ofsteel as well, and that makes
sense because they're theneighbor to the north, so it is
(06:09):
something like steel that that'sa lot heavier than a lot of the
other imports.
If you can get it, you know,next door, that's a lot better
than shipping it across theocean.
But you know, wood is wood istheir big thing and we get a lot
of our lumber from Canada andwe get a lot of our lumber from
Canada.
And one of the main things thatI saw three years ago is that
domestic production, of courseit slowed down.
(06:30):
We had labor shortages and halfof that was related to COVID
and half of that was related tobasically not.
They didn't have the workers tofacilitate all the sawmill, so
a lot of people shut down, but alot of that was the price went
up and so, uh, domestic folkswho were, who were making that
(06:51):
stuff stateside, said hey, ifthey're getting paid that, then
I'm going to get paid that, andthat happens across the board.
I think it's going on with eggsright now.
You know the the uh, I watchedsomething earlier and said you
know the the price of eggsshooting up.
It's not because they have lesseggs, it's just they figured
out a way to, you know, producethe eggs.
But it's just the egg suppliersare choosing to make their mint
and I think, as a businessperson, you know you have these
(07:13):
opportunities when you've beenin business for 10, 20 years
where, hey, if I'm going to makemy retirement, now's the time,
and I think that's what happenedthree or four years ago.
But uh, hopefully, hopefully,they work something out and that
, uh, you know there's not aheavier import, uh import tariff
on Canadian lumber, and thenthat won't give the domestic
production the chance to jack uptheir prices as well.
(07:34):
But uh, moving to Mexico, uh,the main thing we get from
Mexico is lime and gypsumproducts.
So basically all the drywall inyour house comes from down
south and I know they have apause.
Is that right?
30 days, something like that.
Speaker 1 (07:55):
Yeah, it was going to take effect right as his
administration started, or inthe beginning of February, and I
think it's now beginning ofMarch.
Speaker 2 (07:58):
Yeah, and I think his focus probably isn't on
building materials, and so Idon't know how that works.
If you put a tariff on um,gypsum or drywall for this
amount, can you do somethingdifferent on automobile
production?
But, um, anyway, hopefully youknow that stays calmed down
because it's all part of a bigperfect storm.
And if you, you, you know youcan do it on the things that
will help us and not on thethings that will hurt us, then
(08:20):
that's the end game.
But in China I was surprisedthat we get, we get steel from
them.
I didn't think it would be goodto ship that, you know, I guess
, to across two seas or twooceans, but anyway we get a lot
of steel from China.
I didn't realize that a lot ofinterior finished products we
get from China anything tech,and that's no secret that they
(08:42):
have the tech, pretty much thewhole tech market locked down
and appliances, everything comesfrom that neck of the woods.
So you know, a tariff onChinese imported products is
going to be a big deal.
And the last one I'll comment onand there's more countries that
we get things from, but theseare the big four is India.
A lot of our tile, the majorityof our tile comes from India.
(09:03):
Solid surface countertopmaterial comes from India.
Solid surface countertopmaterial comes from there,
Construction sand and bricks.
So a lot of the majority ofwhat we use in a single family
residential house is coming fromthat area, and I think the big
thing, or the big takeaway, isthat, all that being said, it
still only equals 7% of thebuilding process, so it's not
(09:27):
like we're importing 30% of ourbuilding products.
So hopefully that's our savinggrace.
Speaker 1 (09:32):
And a lot of people don't realize that a lot of
lumber comes in from Europe too.
It's not just our neighbors tothe north we get it from, like
the Norwegian countries andstuff, but I don't know how.
Like you said, it's not likethe tariff was put on a bunch of
singular items like all rightbathroom tile is going to get
(09:54):
25%.
So I also wonder, with tariffs,if a country is told, hey,
we're putting 25% on your lumber, will they say, well, screw it,
we'll put 25% on everything wesend to you then, or you send to
us, and then everything's beingtariffed.
So I don't know how laserfocused, you can make a tariff
(10:15):
before the other country says,well, we're going to add 20
things onto this list just toscrew you back.
Right, yeah, reciprocal worksboth ways.
Yeah, that's right, and Ithought that was an interesting
point you made.
It sounds horrible, but it isonly 7% of the money, of the
(10:36):
materials.
But people also don't realizewhat's in their houses in
general.
They think it's wood and nails,but they don't think there's
steel in it.
They don't take inconsideration appliances or
things like that.
Speaker 2 (10:49):
That 7% figure is just for residential.
When I looked into it some ofthe numbers didn't add up.
So when you take in thecommercial construction into
consideration it's going to be.
You know those numbers areprobably a lot more weighted
towards commercial thanresidential, but residential at
this point still sitting atabout 7%.
Speaker 1 (11:10):
Yeah, you think of just a small, let's say a
10-story building.
It's going to be a commercialbuilding going in downtown
Burlington or Wilson.
That's a lot of steel, that's alot of concrete, that's a lot
of stone, that's a lot of brick.
The baseball stadium they'rebuilding in Wilson right now is
nothing but steel skeleton andthere's a lot of it.
So that's all going to beaffecting the cost.
(11:33):
That's all going to beaffecting the cost.
And then gut feeling, donnie,as a builder will how do you
quote a price of a house tobuild it when you could have an
astronomical increase on one ofyour main products that you use
to build?
Speaker 2 (11:50):
Oh gosh, that's the.
That's a loaded questionbecause I don't know how you do
it really.
And I've watched.
I'm a subcontractor with SureTop Roofing so I do the roof
work for several prominentbuilders, you know, from here to
the other side of the state,and I also build houses.
So I see this thing from bothends and I try to pick their
brains and I say, hey, how areyou guys doing it?
(12:10):
Are you doing cost plus only?
And I think, from a builderstandpoint, the only way that
you can cover your rear end isto either charge the homeowner
on a contract price enough tocover you If you do have a 30,
40% increase between the timeyou sign the contract and the
time you actually need thematerials or you do a cost plus
and 90% of these guys are allresorting to cost plus.
(12:32):
And that gets kind of hairybecause banks don't want to hear
that.
Banks want a contract price.
But you know, with everythingbeing so volatile now, I don't
know how anybody does that andsleeps at night because it's
just it could change.
Like you mentioned, that wedon't know with this tariff
conversation if this is going tobe different next week and
these guys are thinking thatexact same thing and you think
(12:53):
about certain items when yousign a contract.
You pull a permit, you dig afooting and so you've got the
concrete there, you've got thebricks for the foundation, then
you've got the lumber, which themajority of the lumber you use
in the first two months of abuild.
So you'll have floor system,walls, rafters.
The plywood's a biggie becauseit covers the roof and the
(13:16):
sidewalls and the floor, butit's, you know, you're talking
seven 16th OSB versus threequarter inch plywood.
Right, I would say those are asafer bet than things that come
later in the process, becauseyou know you, you can pad
yourself a little bit on thoseand and hopefully be okay.
But, um, in all fairness, that'swhat burned a lot of people,
but they were $50,000 over onthe framing budget on a 3,000,
(13:37):
4,000 square foot house, and soI know I'm not giving you, I'm
doing a political answer here.
I sound like I'm running foroffice for a construction
position, but no, it's one ofthose things where cost plus it
seems to be the new norm andbanks a few banks are becoming a
little more friendly to it.
But I think, from a with abuilder homeowner relationship,
(13:58):
if that builder says, hey, youknow we may have to have an
amended contract.
We'll do a contract for thebank, but we're going to do an
amendment to the contract beforewe get started.
That's not out of the ordinarynow.
Speaker 1 (14:08):
Yeah, and I guess also the good news is, when you
are building a house, once youstart on the foundation and you
put down your block and yourbrick and if you're pouring
concrete slabs of some way, thathappens so quick it's not like
you price it and it'll be a yearbefore you get to that part,
versus the inside of the house,or roofing, and I don't think
(14:30):
shingles.
It did make me wonder, becausethe main boys produce them
pretty much in the country,don't they?
Speaker 2 (14:38):
Oh, gosh, that is a deep, deep rabbit hole with the
shingles, sort of like concrete.
Okay, and I'll get back to theshingles.
But the concrete, you may makethe concrete here, but the sand,
like I mentioned, the majoritycomes from India.
The lime, the majority comesfrom Mexico and we just don't
have the natural resources to umto to fill the demand for
concrete.
So they may make the concreterecipe here, but all the
(15:01):
resources for that concrete comefrom other places.
Same with the fiberglass mat,with the shingles, uh, that they
pull in, uh, that from anothercountry, uh, a lot of the
granules or the asphalt that youmentioned, that comes from
another country.
And, depending on the shinglemanufacturer, what I'm seeing
the trend turning to is thatthey are encouraging domestic
(15:21):
production because a lot ofthese guys got burned and they
could not meet the demand whenroofing, you know, went through
a big change a couple of yearsago that they just didn't.
You know we couldn't get.
We could get a black, gray andbrown shingle for about two
years and if you didn't wantthat, then you know, sorry, no
dice, because we couldn't.
There was one manufacturer toget the greens, the reds and the
(15:43):
blues and thank goodness wemade it through that and not a
lot of people wanted the funkycolors, but yeah it it.
This impacts everything.
Speaker 1 (15:50):
Literally, you can bake a cake in your kitchen but
you get all the ingredients fromdifferent places.
Yeah, so even though GAF makesshingles in the US, they've got
several plants strategicallylocated through the states.
They are getting materials tomake them from around the world,
so that can impact it.
So, donnie, I want to call thistariffs for dummies, and again
(16:12):
we're no experts on this, butI'll kind of drop a way.
A tariff could affect the priceor what the reaction to it
could be, through the industryof building and construction,
and then maybe you can give aboots on the ground type of gut
feeling you have.
So we have tariffs put in place.
(16:34):
So we have tariffs put in place.
The first thing people think isthe price going to switch
overnight.
Could we see like a directprice increase right off the bat
?
Speaker 2 (16:45):
Not overnight, but I would say within the year.
Yes, no-transcript.
I think he's smarter than that.
I think the people who areadvising him are smarter than
that and I think that they alljust went through, you know,
even though they're a little bitpolitically protected by being
(17:08):
the powers that be on thisadministration.
So I do know that, I don't know, but intuitively I think that
that would be a bad thing and Iknow that they would want to
avoid that.
Nobody wants that on theirrecord and you know it also.
(17:32):
So many factors.
Where I live I'm right here onthat merged corridor, 40 and 85,
between Greensboro andHillsboro Businesses are coming
left and right.
You know we've got an abundanceof work, but you get off the
beaten path a little bit and Ican't speak for those folks.
And it may be one of thosedeals where you may have to go
towards a bigger city tomaintain the work, and I mean,
(17:54):
that's just how things move andshift, but I'm sure hoping that
the tariffs don't affect it thatway, but overnight I don't
affect it that way.
And but, but overnight I don'tthink so.
Will it be as cheap to buildnext year?
I think that's a supply demandissue, but but at the very least
, what I see is, if it does goup, I think that the housing
(18:16):
market will lean towards resalemore than new builds, so people
want to buy what's already onthe ground.
What you know was what youbuilt for the old housing cost a
couple of years ago will becomethat much more popular, and
then that's going to translateto less inventory.
So, either way it goes, I don'tknow that I have a really
positive forecast on it, but youknow that's what I do for a
(18:36):
living, so I would like to saythat heck, yeah, let's, let's go
, but let's build all you can.
But, um, unfortunately I'm notin control of that part.
Do you worry?
Speaker 1 (18:45):
about not to beat up on Canada, but it's easy, cause
they won't, they'll still bepolite back.
Um, do you worry that theymight go?
Well, fine, we're just gonnaship you a whole lot less, and
then we're back to like whatCOVID was supply issues.
Speaker 2 (19:01):
Well, I think the catch 22 there is that if they
ship a whole lot less, they makea whole lot less money.
So you've got you know who'sgoing to regulate that.
Is the government going to putthe squeeze on them and say you
can only send this many boardfeet per month.
And if we're demanding and ourdemand, our housing demand, is
still high, I think they'll finda way to work around that.
And you know the end game.
And if you've got somebodythat's gung-ho and doesn't want
(19:23):
to see the light at all anddoesn't want to think that, hey,
this could be negative, thenthey're going to say well, you
better domestic, you knowproduction better go through the
roof over here, and statesidesawmills better get their rear
ends in gear.
And that all sounds great, butthere's a lot of moving parts to
make that happen.
Speaker 1 (19:39):
It could become very volatile and it puts a lot of
uncertainty in the market.
So it makes people scared or alittle fearful to maybe pull the
trigger on building something.
And that idea of fear probablycan affect an economy just as
much as any other singular item.
Just as much as any othersingular item because when
(19:59):
people are fearful or scared ofsomething and they stop spending
it spreads like a virus veryquickly and just can shut things
down.
Speaker 2 (20:14):
Yeah, consumer confidence is everything and I'm
going to change hats here andgo to the roofer world.
But you know, if you've got aroof, we preach on the show that
roofing and HVAC are your twobig ticket items that are
guaranteed to wear out.
And if somebody can kick thatcan down the road and they're
not very confident in what'sgoing on in the world, then
that's what they're going to do.
So they may put a Band-Aid onthat roof and try to squeeze an
extra three or four years out.
(20:35):
And you multiply that bythousands of people over
hundreds of cities.
Then all then, you know, all ofa sudden, the, the roofing
industry, shuts down.
And you know, fortunately, we'vebeen really busy and and praise
report since, uh, trump won theelection.
It was almost like the phonestarted ringing overnight, so I
can testify to that then.
And we were busier going intothis winter and thank you to all
(20:56):
for all the support, foreverybody who's a loyal listener
and a new listener, because, uh, people say, hey, we heard your
show and a lot, you know, a lotof people get their consumer
confidence out of what we sayand, uh, you know, I mean we're,
we've got our finger on thepulse with this stuff.
But we went into this winter,I'm pleased to say, with more on
the books than we've had sincepre-covid and um.
You know that's a good thing, Ihope, and we've got a really
(21:20):
exciting show coming up and notto sidetrack here, but hopefully
this runs a lot of the stormchasers out of town.
There's a lot of people who justgo knock on doors.
They're not legit operations.
They use a different crew fromhouse to house to house and you
just don't get the same endresult as using somebody locally
owned and operated who've hadthe same people for years and
years.
(21:40):
So I'm hoping for both sides tobe true.
I hope that the demand stayshigh and I hope for a market
cleansing to get some of theknuckleheads out of here at the
same time.
Speaker 1 (21:49):
Yeah, my wife and I are working the intricacies of a
HELOC, determining, um what wewant to do, because we want to
do home improvements and youknow a roof being one um,
interior stuff, some other smallexterior things like a new shed
, and I see a lot of people comeinto our stores and they have
(22:09):
that same sentiment.
Hey, I feel like I can finallypull the trigger and do this.
I do want to add on the roofers.
I'm not going to give any names, but there's roofers that I've
met through the business thatare the son or grandson of the
founder.
They've been.
I mean, it's generational and Iknow you have generational ties
to construction too, and I thinkthat's a reason why you need to
(22:32):
ask around and ask people hey,who do you recommend, who did
your stuff?
And avoid those.
I'm not saying they're bad, butthe franchises kind of give me
the when it's a national numberand you look in, they're based
in Minnesota or something.
There's a lot of localbusinesses that are generational
(22:55):
.
That's what they've been doingand they're very good at it.
So, ask around, ask suppliershey, who do you recommend to do
painting or brick and block orroofing or something?
Because you tend to find muchbetter workers.
And again the Tommy Tank Topand those guys, they're scary,
chuck in a truck.
Speaker 2 (23:15):
Chuck in a truck.
Thank you, tank Top Tommy.
I love those guys, but not onmy job.
Hey, they're good, they're coolin the bar, but, yeah, not on
the job site I want to go, butnot on my job.
Speaker 1 (23:25):
They're cool in the bar, but not on the job site.
I want to go back to somethingyou mentioned also about wood
mills.
I said, hey, why don't we justcut down our trees and start
doing the wood here?
The impact on domesticproduction it sounds good, but
it would take literally years.
You can't just fire up a plant.
There's a lot of industrieswhere we think we could pick up
the slack, but that's not goingto happen in a year or two years
(23:47):
time Absolutely not.
Speaker 2 (23:48):
No, it's.
That's one of those things with.
You'll need an investor, abusiness plan, a lot of willing
workers.
You know, and like I mentionedwhere I'm living thank God, I'm
so grateful that the economy isbooming around here and
everybody.
There's a huge influx of peoplemoving to the middle third of
the state, but that's not thecase everywhere.
So you need all that to happento have somebody with a big
(24:12):
enough sawmill to meet the localdemand.
And I agree with you 100%,that's not going to happen
overnight.
Speaker 1 (24:18):
And this is the Carolina Contractor Show.
We're talking about tariffs and, as we said at the beginning of
the show, neither Donnie nor Iare economists or tariff experts
, or even amateurs, or evennovices.
But Donnie having boots on theground, I working in the supply
side of it, we do tend to getsome ideas of what's going on.
(24:38):
Before it hits the generalpublic, I will say build now,
it's only going to get moreexpensive.
Stop trying to time the top,the hit the market just right to
get that down point to buy ahouse or build a house.
Just go ahead and geteverything in motion, because
construction costs do go up anddown, but they tend to go up.
(25:00):
And futures, by the way, forlumber soft lumber I looked this
up middle of February was 605and it was higher last year at
618.
So even with the threat oftariffs, futures have not hit a
new high yet.
That could happen and some ofthe indirect effects of a tariff
(25:24):
are businesses that are relianton not necessarily materials,
but your, for example, yourbusiness, uh, and other
businesses might rely onbusinesses like a roofing
company to buy their supplies.
So if you're not buying as much, that affects them.
They don't buy lunch at therestaurant next door.
(25:47):
They don't buy the new car, soa tariff on something unrelated
to your business can affect.
Wow, I think I just went allKamala in a word salad there.
Speaker 2 (25:59):
I was following.
You know, man, it made perfectsense to me.
But yeah, nice analogy.
Speaker 1 (26:02):
The other thing we don't know about, donnie, is
negotiations and policy changes.
This is inside baseball.
That happens in rooms thatwe're not invited to be in.
So I am curious, and maybe youeven have a gut feeling, what's
going on behind the scenes?
When Trump comes out publiclyand says I'm raising a tariff of
25% on these countries andthese materials, and the other
(26:26):
country says something back,what are the handlers in the
rooms maybe actually saying?
Do you even a gut feeling?
Speaker 2 (26:37):
I think he's just a good negotiator and I think he
does a lot of that to make themsquirm.
I think that if he even bringsit up at all, it was because it
was unfair in the first placeand I think another couple of
things that impact what we'retalking about is if we get gas
prices down and we get thisinflation problem handled, then
(26:58):
that puts money back in people'spockets overnight and so, as
long as the tariffs don'texplode, the pricing and it
maybe you ease up.
Just because of a hard-nosednegotiator, I think a lot of
that stuff will balance out orflatline after about a year.
So if we have to go through atough year, at least the cost to
(27:18):
once it gets here to ship itaround the country with from the
gas prices being low and people, you know, not paying an arm
and a leg for groceries and allthe other things that are
impacted by inflation.
As long as he can fix those two, you know, and we don't know
what's going to happen with thetariffs, but I think it's going
to be a big balancing act and ifI had to be a fly on the wall
in that room you just mentioned,I would say that that probably.
(27:40):
That's probably the approachthat they're taking, because,
like I mentioned I don't know 10, 15 minutes ago in the show
that they're too smart for that.
They don't want a housingcrisis on their hands.
And I and and the big picturewe're finding all this
government spending that's beenout of control and I mean we
could do a whole nother show onthat.
But I'm blown away by whatwe've been spending money on and
what the Doge folks haveuncovered in the last just in
(28:02):
two weeks.
I don't think anybody's madethis much progress in just a
short amount of term with thenew administration as these guys
have.
So my hat's off.
Things are good, things aregood.
Now I'm going to keep prayingabout it and keep an optimistic
outlook and, um you know,hopefully we can come back and
revisit this topic in a in acouple months and all will be
well.
Speaker 1 (28:21):
I would love to do a Doge show and maybe we can get
Elon Elon who, by the way weknow listens to the show um, get
him on.
But I was just talking to themissus today.
Yep, um, you know how.
They're finding a billion here,500 million there, 10 million
over here misspending.
(28:49):
They started looking intoMedicare, medicaid, and Musk put
out on X.
He said it's somewhere, wethink, between 1.7 and 2.1
trillion in misspending onMedicare and Medicaid, dod and
IRS.
And I said several months ago,if you could have Elon Musk and
or Jeff Bezos, the Amazon guy,use their influence and I don't
mean this in a sinister way, butto streamline certain things,
(29:09):
like they say, yeah, we'll haveit there tomorrow they should be
able to process DMV and taxesand Medicare, medicaid payments
and security payments and thingslike that at a much more
efficient rate.
And you probably even saw thatthing in the caves where they
(29:32):
process federal governmentpensions and stuff they send it
down in the big cave and file itaway and it's all paper.
Speaker 2 (29:39):
It's nothing electronic about it.
And yeah, I just heard aboutthat today and I'm blown away by
the people who are opposed tothis.
People are actually upset aboutthis and I'm thinking you guys
are drinking the wrong Kool-Aid.
You have been and you're indenial even still, and I don't
understand, with our nationaldeficit, who wouldn't be happy
about what's happening right nowBecause deficit?
Who wouldn't be happy aboutwhat's happening right now
(29:59):
Because we're trimming?
Speaker 1 (30:00):
the fat on another level.
And one more thing, because Iknow people like to hear this
and you just started winding meup and run out of time.
You notice how, when Trumptalked about how they'll rebuild
Gaza, and what I noticed is thebig giant campus college
protest and the 50,000 peoplewalking down the street
(30:20):
protesting it and saying no haskind of evaporated.
And it hit me, it's becausethey were paid and I guarantee
it was USAID money that came inand paid these people, because
the protest have pretty muchvaporized about everything of
Trump.
You'd think they'd have 10,000people in every single campus.
No, they got like one inWashington DC and it was like 50
(30:42):
people was the protest and halfof them were congressmen.
Speaker 2 (30:46):
Did you see that the budget for USAID was bigger than
all the CIA, the FBI, all thefederal agencies that you hear
about all the time combined?
They had more money to workwith than they did.
So you know, I think that theysaid that they I heard it worded
today that they attacked thecentral nervous system for the
deep state and, um, I mean, thattakes some guts, man, but
(31:08):
somebody had to do it and andI'm just glad that that we got
somebody who's willing to pushforward.
They're not worried aboutanything, uh, reputation wise,
and they're.
They're pulling the curtainback on the real bad guys.
Speaker 1 (31:19):
Yep, you see Elon Musk pick up a gold phone and
say get me big balls.
And then, if you're not surewhat that is, you need to look
into it.
But to wrap up, the topic oftoday's show was about tariffs,
and the consensus is that, whiletariffs are intended to protect
domestic industries, they canresult in some higher consumer
prices, and that's going to beparticularly in industries like
(31:42):
construction and home building,which is what is heavily relying
on imported materials likelumber and, as you pointed out,
donnie, where we get metal,where we get tile, where we get
gypsum, where we get lime.
A lot of people think that weproduce all that stuff in-house
in the United States.
We don't.
So the exact impact is going tobe based on a lot of factors,
(32:03):
and fear is one of those.
I'm with you, donnie.
I think the shock will start tolevel off as we go through the
next few weeks and months andthen, if there is any effect, I
think they'll work their way out.
My gut says we're not going tosee these massive price
increases.
Some, some things will, andthat'll affect overall prices of
(32:24):
housing.
But again, I don't think youwait to build a house.
If you want to build or buy.
Speaker 2 (32:29):
just start doing it now yep, full agreement, man,
full agreement, good points good.
Speaker 1 (32:33):
Well, I hope you like this amateur take on tariffs
and how it affects the economy.
But eventually we all feel itin different ways, whether it's
the price of eggs literally, orthe price of drywall and metal
roofing and all that other stuff.
But we'll put the show up onthe website in podcast form and
the website address isthecarolinacontractorcom and
(32:54):
we're thankfully tuned in.
We thank you for the supportand we hope to hear and see you
again next week on the CarolinaContractor Show.
Have a great day everybody.
Thanks for listening to theCarolina Contractor Show.
Visit thecarolinacontractorcom.
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