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The Connection between Tariffs and Industrial Property
The U.S. tariff situation is anything but stable, with the White House issuing different announcements every other day or so. Or, as Cushman & Wakefield’s Americans Head of Logistics and Industrial Research Jason Price commented in a recently released video: “The situation remains fluid, and there are still too many unknowns regarding the size, scope and timing of the tariffs to be able to assess the precise impact.”
However, in the video entitled “Tariff Uncertainty Reshapes U.S. Industrial Demand,” Price suggested that tariffs could impact the industrial sector.
Not Just About Trade
While the tariffs’ impact on global trade is a huge concern, Price pointed out that industrial is more than seaports and inland ports. “Industrial demand is driven by many factors . . . (such as) e-commerce, domestic consumer spending, construction materials and third-party logistics,” Price said.
As a result, strong offsets are in play to reduce the tariffs’ potential impact on industrial real estate demand.
More Imports
January 2025 data concerning U.S. maritime ports reported 2.49 million TEUs of imported goods. “Shippers continue to bring goods into the country amid the uncertainty surrounding the tariff landscape,” Price said. He added that January’s figure surpassed the January 2022 record.
It’s no secret that the uncertainty causes firms to stockpile goods and materials. ‘This may lead to a short-term bump in demand for industrial space,” Price said.
Then, There’s Inflation
Many economists have connected tariffs with higher inflation. Bond investors think inflation will average approximately 2.6% over the next five years. “In comparison, that number was 1.8% before (Donald) Trump was elected,” Price said. “Bond investors are certainly interpreting Trump’s policy as being more inflationary.”
He suggested that higher inflation expectations are hovering in a “reasonably low range.” However, “This is a key trend that we’ll be watching as there are many implications for both real estate occupiers and investors,” Price added.
- ◦Lease
- ◦Development
- ◦Economy
- ◦Policy/Gov't
