Executives warn tariffs and labor shortages could drive prices higher

South Dakota businesses are absorbing higher costs from tariffs, expensive borrowing, artificial intelligence infrastructure demand and a tight labor market, executives said Thursday at an economic briefing in Sioux Falls.

The costs of metals used in construction have risen, while transformer prices are up more than 400% since 2020, according to the panelists. Companies have absorbed some increases, but utility rates and other consumer prices could rise as those costs work through the economy.

Higher interest rates are also raising borrowing costs for mortgages, car loans and businesses. Executives said labor shortages and immigration policy changes are making it harder to expand and contain expenses.

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