For anyone wondering how much President Donald Trump’s plan for extended tariffs could affect the construction industry, Wisconsin homebuilder David Belman told Bloomberg that a typical house could jump $29,000 in price.
He estimated that $14,000 of that amount would be due to the higher price of Canadian softwood, a critical item in framing and construction. Tariffs on Mexico could increase the cost of imported gypsum used in drywall. More than 70% of softwood and gypsum imports come from Canada and Mexico, according to the National Association of Home Builders.
The 25% on Canada would be on top of the 14.5% duty already on softwood for a total of about 43%. The extra 10% on China on top of existing tariffs would mean more expensive imported assemblies like countertops, doors, and appliances.
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After separate discussions with Mexican President Claudia Sheinbaum and also with Canadian Prime Minister Justin Trudeau, Trump announced that he would delay the 25% tariff for each country by 30 days. For longer? No one knows, and the uncertainty adds to the tensions.
The proposed 25% tariff on Canada and Mexico would supposedly last until there was an end to drug trafficking and migrants. How that would be regulated doesn’t seem to be clear.
“We believe that suburban multifamily construction projects may be most impacted by tariffs on Canadian imports, given their greater proportion of wood frame deals than urban areas and the high proportion of lumber used in the construction industry that originates from Canada,” Brian Clement, senior vice president and head of acquisitions at LBX Investments, told GlobeSt.com in December 2024.
There has already been an ongoing economic crisis in construction — an industrial version of inflation that many forget. A GlobeSt.com analysis shows that between December 2019 and December 2024, private sector final demand construction costs increased by 40.5%, including materials and labor.
While much of the focus is on home building and much commercial construction is done on frames of steel and not wood, the rest of commercial real estate won’t escape.
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