'Tell Me The Rules': Builders, Manufacturers Sit On Hands Awaiting Trump Administration Clarity

Some builders and manufacturers are rushing to diversify supply chains. Others say they feel stuck as they wait and watch to see how Trump administration tariff and economic policies play out. 

But all agree that uncertainty is halting investment decisions.

And at a Thursday event on the global economy, the head of a major multifamily REIT and an executive for global electronics manufacturer Toshiba said they need to know the new rules in order to play by them.

“We are sitting on our hands right now, waiting,” Ric Campo, commission chairman of the Port of Houston Authority and CEO of multifamily REIT Camden Property Trust, said at Greater Houston Partnership’s State of Houston’s Global Economy event.

“Tell me the rules and I’ll play by the rules. But I need to know what the rules are.” 

President Donald Trump announced sweeping tariffs on April 2, or “Liberation Day,” before suspending them less than a week later. But new levies remain, including a combined 145% levy on Chinese imports and a 25% tariff on vehicles made outside of the U.S. Some of the latter tariffs were relaxed by executive order Wednesday, though they could still raise price tags substantially.

Japanese electronics company Toshiba is rethinking its strategies and adapting source relationships for its global supply chain in response, said Jeff Simmons, senior vice president and general manager of marketing and sales for Toshiba America Energy Systems. 

Some of that was already in the works due to supply chain disruptions during the height of the pandemic. But the administration's policies have placed extra urgency on the process, Simmons said. 

“So we’re scrambling a little bit to try and find ways to onshore some of our supply chain that quite frankly, we were already planning to onshore because Covid was a big wake-up for us,” he said.

The Asian supply chain still hasn’t recovered from the disruption of the global health crisis, he said. For that reason, Toshiba is shifting a significant portion of its supply chain from China to India, where “the tariff picture is much better,” Simmons said. 

Meanwhile, Camden has about $1B to $1.5B worth of properties under construction across the country, Campo said. This year, the REIT has a $650M budget for construction starts, and about half a million is underway, he said.

All things considered, tariffs will only raise the price of Camden’s projects by about 2%, Campo said. But other macroeconomic factors are also straining investment decisions, and Camden has delayed one project already while it waits to see how the economy performs and how long tariffs will last.

“The tariffs themselves are not the issue about whether Camden will start properties or not, because it’s not a material change,” Campo said. “The issue is the cost of capital has gone up, and the uncertainty about the economy makes me a little nervous.” 

Waiting to figure out what the permanent tariff policy will be and whether there will be a recession delays projects and decisions and has a reverberating impact, he said.

A typical $150M to $200M Camden project employs 400 people for two and a half to three years. The purchase of construction materials and creation of ancillary employment also stimulates the economy, Campo said.

“That’s one project,” Campo said. “So when you start delaying — I’m delaying one and all of my competitors are delaying probably three — it’s just a drag on the economy.” 

Camden is happy to purchase U.S. products, it just needs to know that the products are high quality, affordable and available in a reasonable timeframe, he said.

During Trump’s first administration, Camden switched from buying Chinese cabinets to American-made ones. The price difference was minuscule, Campo said. 

Campo fully supports the domestication of manufacturing on all levels.  

“The challenge, however, is we need to make sure that we don't break our business to support onshoring,” Campo said. “That we have a transition period where it makes sense to make that happen.”