Latest Tariff Actions Add Uncertainty to Housing Market
Recent tariff developments could create more uncertainty for home builders over building material supply chains and pricing.
On July 20, President Trump imposed a 50% tariff on a broad range of Canadian goods, including cement, plywood and furniture. The action would not affect other existing tariffs on key building materials, including softwood lumber, steel, aluminum and copper.
The tariffs on Canadian products are set to take effect in 30 days. They would be imposed under Section 338 of the Tariff Act of 1930, which allows tariffs of up to 50% on imports from countries that discriminate against the United States.
Trump said the tariffs are in response to Canadian tariffs on U.S. cars, dairy and alcohol products. Unlike previous tariff actions, goods covered by the U.S.-Canada-Mexico Agreement would not be exempt.
The 30-day delay gives the United States and Canada time to negotiate an agreement that could avert the tariffs.
Section 122 Tariffs Expire, New Levies Imposed
Meanwhile, the temporary 10% global tariffs Trump imposed in February under Section 122 of the Trade Act of 1974 expired on July 24. Those tariffs came after the Supreme Court struck down his authority to impose tariffs under the International Emergency Economic Powers Act.
To replace the expiring Section 122 tariffs, the administration announced new duties under a different authority. Citing a ban on imports made with forced labor, the Office of the United States Trade Representative released a fact sheet stating that the U.S. will impose tariffs of 10% to 12.5% on imports from 60 nations under Section 301 of the Trade Act of 1974, which targets unfair trade practices affecting U.S. commerce. The new duties took effect July 24.
The new tariffs will apply to most imports from the 60 nations. Exemptions include some products, such as oil, gas and fertilizer, as well as goods that qualify for duty-free treatment under the U.S.-Canada-Mexico Agreement.
Additional tariffs could also be coming. The administration is still investigating whether 16 nations have engaged in excess manufacturing, driving down prices and putting U.S. companies at a competitive disadvantage.
Canadian Softwood Lumber Tariffs Set to Fall
In a positive development, the U.S. Commerce Department is poised to lower anti-dumping and countervailing duties on Canadian softwood lumber imports from a combined 35% to 25% in mid-August.
The decision is part of the regular review process the United States uses to provide relief to American companies and industries affected by unfair trade practices.
NAHB continues to closely monitor the changing tariff landscape. With housing affordability already near historic lows, we continue to urge the Trump administration to exempt building materials from its broader tariff strategy and avoid new trade barriers that could worsen the housing crisis.