Since taking office in January 2017, former President Donald Trump has slapped multiple rounds of tariffs on Canadian exports. Together, these economic measures have had a historically skewed impact on black renters in the United States. Specifically, these tariffs focus on softwood lumber, an essential ingredient in the building and renovation of homes. Our neighbor to the north accounted for a whopping 69% of U.S. lumber imports in 2023. Without these safeguards, the new trade policies may end up increasing housing costs for American consumers.
When his first presidential campaign rolled around, one of Trump’s key policy proposals was a 35% tax on imports from Canada. This new tax will apply to non-United States-Mexico-Canada Agreement (USMCA) compliant products beginning August 1st. Softwood lumber accounted for most of the $8.5 billion in lumber that the U.S. imported from Canada. That’s a big deal considering how fundamental it is in homebuilding. This year, Canada made up 25% of iron and steel the U.S. imported. It was responsible for 18% of U.S. copper imports, further complicating how these factors might drive up building costs.
Leading industry stakeholders are sounding the alarm on these tariffs, which they say would have a dire impact on housing affordability for millions of Americans. Overall, the increased expenses due to tariffs could amount to an additional $20,000 per home by 2027. In 2023 imports accounted for $13 billion or 7% of the value of all new single-family and multifamily construction estimated at $184 billion. This represents our massive dependence on foreign materials.
Historically, as much as 70% of the softwood lumber imported for use in U.S. home construction has come from Canada. This deep reliance on Canadian lumber is deeply troubling. Specifically, Trump has threatened a 50% tariff on all copper imports as he has already done with imported steel and aluminum once before, via a 50% tax. The unpredictable, rogue imposition of these tariffs has confused builders and consumers about the future cost of goods.
As industry analyst Rob Dietz explained, many builders are being squeezed by rising material costs associated with tariffs. He said a large share of builders still have not felt these changes.
“It’s important to note that about 40% of the builders in our survey noted no cost effect,” – Rob Dietz
White House spokesperson Kush Desai bragged about the administration’s certainty that foreign exporters will pick up the cost of these tariffs. They claim that American consumers won’t be affected as much.
“The Administration has consistently maintained that the cost of tariffs will not be borne by American consumers, but by foreign exporters who rely on access to the American economy, the world’s biggest and best consumer market,” – Kush Desai
Even today, experts remain divided over the implications of these tariffs. They further forecast that the proposed measures would mean increased homebuilding costs, aggravating what’s already a dire housing market in the U.S. Canada continues to be the third-largest source of imports that are ultimately incorporated into U.S. homebuilding, behind only China and Mexico.
