Tariffs push Missoula library project back into funding gap, director tells Tester

Tariffs imposed by the White House on steel and aluminum imports have left the Missoula Public Library facing an uphill climb in funding construction of its new home, the library's director told Sen. Jon Tester on Thursday.

Montana growers and producers, along with members of the construction industry, said President Donald Trump's tariffs on U.S. trading partners have had an impact on pricing and created ripples of uncertainty across established markets.

While beef, wheat and other agricultural products are in the crosshairs of a looming trade war, the tariffs have already left the Missoula Public Library facing a budget deficit as it gears up to break ground this August on its new downtown building.

“We're supposed to break ground on Aug. 1, but we're a little distraught over what the pricing is going to do and how much more money we can actually raise in our community to fill that need,” library director Honore Bray told Tester.

In 2016, Missoula County voters approved a $30 million bond to help fund construction of the new library. The Missoula Public Library Foundation also raised $5.56 million to complete the project.

The combined $35.6 million was enough to cover the project as designed, until tariffs imposed by the White House in June upended that equation.

“When we found out we were on budget, all the money was raised,” said Bray. “Then we had a meeting with Dick Anderson Construction and they told us we were now over budget.”

Bray said tariffs on steel and aluminum have sent material costs soaring. The cost of rebar has increased library construction by an estimated $100,000 alone. The library's design, years in the making, calls for aluminum siding, the cost of which has also risen.

Given the uncertainties in the market, Bray said, the general contractor is reluctant to place a “guaranteed maximum price” on the project, which has library officials nervous.

“It has been very difficult to get pricing from the contractor because of the tariffs – they're afraid of what the pricing is going to do,” Bray said. “We think we're going to have to go out and raise at least $500,000 more.”

Despite the increases, Bray said, the library still plans to break ground on Aug. 1, fearing that further delays will only lead to another escalation in costs.

“Are people just going to stop in the middle of their building projects because they don't have the funds because prices keep going up so much?” Bray asked. “You can't have no tariff one day and a tariff the next. Somehow, people have to be able to plan for the future.”

Montana growers and producers expressed similar concerns, including members of the U.S. Cattlemen's Association, the Southern Montana Sugar Beet Growers and the Montana Grain Growers Association.

Michelle Erickson-Jones, executive director of the Montana Grain Growers, said 73 percent of the state's wheat is exported, and China is one of the leading buyers. The state's hard red spring wheat is in particular demand.

“If and when the tariffs are enacted tomorrow, we face significant duties on roughly $65 million in wheat exports to China annually,” said Erickson-Jones. “Right now, current-day impacts have been substantial.”

The price of steel and equipment have already climbed under the tariffs, putting a pinch on Montana farmers. That has prompted many producers to pass on equipment purchases, including a needed bushel bin, which Erickson-Jones had planned to purchase from a domestic company.

“We actually didn't put up that bin for that reason, because it was a 20 percent increase in price,” said Erickson-Jones. “That's a small bin builder who didn't get a job, a U.S. bin provider who didn't get to sell a bin, and a U.S domestic steel supplier who didn't get to ship that steel. That impact has been seen across the farm economy.”

Herb Karst, who owns a farm in Sunburst, said that while trade is vital to Montana agriculture, the relationships needed to secure those transactions are equally important.

Karst, who also serves as a consultant to the Mexican brewing industry's largest beer labels, including Corona and Modelo, said White House rhetoric and the arrest of two U.S. citizens in Havre for speaking Spanish has jeopardized the relationships he's spent decades putting into place.

In his business, he said, words matter.

“The tariff talk, the other rhetoric that's being vented about, has certainly made my job difficult to convince these companies that we'll continue to be there,” Karst said. “That has significantly hurt our ability to do business.”

https://www.missoulacurrent.com/business/2018/06/tariffs-montana-manufactures/