While it’s unusual to praise tariffs as the “greatest thing ever invented,” a title usually reserved for sliced bread, Donald Trump has consistently criticized his trade policy. I have been speaking out about it.
impending return white house That’s because President Trump’s proposed tariffs would likely increase the price of essential construction materials, potentially increasing the cost of building homes in the United States. This reflects the impact of increased tariffs on Canadian timber on housing costs in the previous term.
Under President Joe Biden’s administration, tariffs on Canadian softwood lumber remain in place. It has doubled. This led to factory closures and job losses in Canada and increased costs for U.S. builders.
President Trump’s current proposal calls for a flat 10% or 20% tariff on all imports, and an additional 60% to 100% tariff on imports from China. On November 4, the final day of the campaign, President Trump also said: impose a 25% tariff on all Mexican products “We have to stop the onslaught of criminals and drugs coming into our country.”
pantheon macroeconomics Forecasters predict that a universal 10% tariff could raise inflation by about 0.8 percentage points next year, further stressing U.S. manufacturing. According to tax foundationa 20% tariff would increase taxes on U.S. households. Average difference of $2,045.
“We don’t have enough details yet to be specific, but based on the broad outlines that have been outlined so far, there is a risk that home prices will rise,” said Mike Fratantoni, the paper’s chief economist. Mortgage Bankers Association (MBA). “The most likely effect of the tariffs would be to increase home prices at a time when it is very difficult to buy a home at an affordable price.”
Latest Framing material price measurement from National Home Builders Association (NAHB) has shown steady growth, with framing lumber up 2.9% for the week ending November 1, and up 17.2% year over year. Sawmill downsizing and closures in North America, particularly Canada, are impacting supply for companies as well. western forest products and Canfor Production will be cut due to weak demand and high U.S. tariffs.
In addition to raw materials, other items such as garage doors, air conditioners, and trash cans could also see price increases. President Trump’s previous tariffs included tariffs of up to 30% on steel and aluminum, raising construction costs across the board. According to a report from Voice of America.
Since the details of the tariffs have not been finalized, Fratantoni said there are several avenues they could create.
“If you just have tariffs that are specific to a country, there is always the possibility that you can source those inputs from other countries at similar costs,” he said. “If it were a broad pricing structure, it would probably lead to more inflation across the economy and certainly more costs for the housing industry, as the ability to find lower-cost raw materials would be reduced. ”
During President Trump’s first term, tariffs on Canadian softwood lumber increased costs for home builders. Back in 2018, NAHB estimated that the tariff would increase the cost of constructing a single-family home by nearly $9,000. The impact on lumber prices has been dramatic, with costs rising nearly 80% year-over-year due in part to taxes.
According to the Tax Foundation, the Trump administration Introducing approximately $80 billion in new taxes It imposed tariffs on Americans by imposing tariffs on thousands of products worth approximately $380 billion in 2018 and 2019. This is one of the largest tax increases in decades.
Ryan Tatro, Connecticut-based owner RT Construction & Maintenance LLCsaid it is optimistic about construction costs despite news of impending tariffs.
“During the Biden administration, my income decreased by 21%,” Tatro said. “Costs were rising and there was a shortage of workers. Five years ago, I was interested. [rates] It was low. Materials were quite low. For example, four years ago a sheet of OSB plywood cost $9, but now it’s nearly $50. ”
Tatro said he and his colleagues in the construction industry are hopeful, but acknowledges they don’t know what will happen next year.
“Putting a price on a job is a huge influence for builders, but in the past they could give customers a 60-day grace period. Prices are so volatile that they literally gave people five days to give them a grace period. “There will be,” he said.
