Korean-American Construction Faces Rising Costs Amid Tariffs

The Korean-American construction industry is struggling with rising material and labor costs. New tariffs and stricter immigration enforcement have worsened the situation.

Tariffs Drive Up Material Costs

Last month, a 10% tariff on Chinese imports caused prices for cabinets and granite to rise. On March 12, a 25% tariffon steel and aluminum added more financial pressure. These price hikes are making construction projects more expensive.

The California Korean Construction Association (CKCA) and the Korean American Institute of Architects (KAIA)report that rising costs have already halted work at 10 construction sites in LA’s Koreatown.

Choi Jeong-ho, former CKCA president, explained, “Rising material and labor costs have stopped excavation and framing projects due to funding shortages.”

Fluctuating Costs Create Uncertainty

Material prices continue to change every month. Choi added, “Suppliers increase prices regularly. Since construction contracts have fixed rates, contractors must absorb unexpected costs, leading to frequent project stoppages.”

Since the pandemic, material prices have already increased 30%. Industry experts warn that additional tariffs could make small and mid-sized businesses even more vulnerable.

Building Costs Continue to Climb

The cost of constructing a 50-unit apartment in LA has jumped from $250 per square foot before the pandemic to $350. If more tariffs hit wood and finishing materials, costs could climb another 20%, reaching $450 per square foot.

Kim Seong-bae, vice president of KAIA, expressed concern: “China and Canada supply most of our building materials. Canada provides wood, while China supplies furniture, lighting, and sinks. With these tariffs, more contractors may have to pause projects.”

Labor Shortages Intensify Challenges

A shortage of workers is another major issue. Many construction sites previously relied on undocumented workers for temporary, low-wage jobs. However, stricter immigration enforcement has reduced this labor pool, increasing competition and driving wages higher.

Wildfire Rebuilding Costs Surge

A Fox 11 News report noted that rebuilding over 16,000 homes in LA due to wildfires could cost 25% more because of tariff hikes.

More Tariffs on the Horizon

President Trump announced a possible 250% reciprocal tariff on Canadian lumber and dairy products starting in April. The 25% tariff on all products from Mexico and Canada has been postponed until April 2, while a 20% tariffon Chinese products remains on schedule.

BY HYOUNGJAE KIM [kim.ian@koreadaily.com]