U.S.-Canada Trade Tensions Add to Market Uncertainty

The escalating U.S.-Canada trade dispute is a setback for residential construction. Talks between the two countries collapsed last Friday, and President Trump proceeded with his threat to impose 50% tariffs on about $20 billion in Canadian goods.

The tariffs apply to plywood and engineered wood products, including laminated veneer lumber and fiberboard. Canadian plywood holds a small share of the U.S. market. The tariffs also cover Portland cement, which represented about 16% of U.S. imports from Canada in 2025. Still, the U.S. is not heavily dependent on imported Portland cement, as imports account for roughly 15% to 20% of the overall market. The U.S. also sources cement from a broad range of countries, and Canadian Portland cement is generally more expensive than cement from other suppliers.

Notably, the new Canadian tariffs do not apply to softwood lumber or other goods subject to tariffs under Section 232 of the Trade Expansion Act of 1962, which allows the president to impose duties on imports deemed by the Department of Commerce to threaten national security. Steel, aluminum and copper are currently subject to Section 232 tariffs of up to 50%.

Canadian Prime Minister Mark Carney announced over the weekend that Canada plans to retaliate with “dollar-for-dollar” tariffs beginning Sept. 8. Trump responded today by threatening to double tariffs on Canadian autos to 50%.

Building material tariffs heighten market uncertainty, strain supply chains and increase construction costs. As the president continues to advance his tariff agenda, NAHB is urging the administration to exempt building materials in light of the ongoing housing affordability crisis.