How Tariffs Affect America’s Building Industry

By Nikki Giordano, CEO, AHBA

The building industry has faced a number of challenges in recent years. Builders have battled labor shortages, supply chain disruptions, increasing regulatory hurdles and high mortgage interest rates. Proposed tariffs are the latest obstacle facing builders. 

Imposing tariffs on imports including building supplies could further drive up the cost of new construction. At a time when the country is in desperate need of affordable housing, any added cost will only further complicate an existing problem.  

More than 70% of softwood lumber and gypsum (used for drywall) come from Canada and Mexico, respectively, according to the National Association of Home Builders. While President Donald Trump’s administration has declared lowering the cost of housing and increasing the housing supply a top priority, tariffs work against this goal. 

“Tariffs on lumber and other building materials increase the cost of construction and discourage new development, and consumers end up paying for the tariffs in the form of higher home prices,” said NAHB Chairman Carl Harris. 

For example, a 25% tariff on softwood lumber products from Canada would be in addition to an effective 14.5% duty rate already in place. This means Canadian lumber tariffs will rise to nearly 40%. That cost would be passed on to the homeowner. 

Tariffs on building supplies are not the answer to America’s housing crisis. AHBA and NAHB believe building materials should be exempt from any future tariffs. AHBA and NAHB will continue to work with local and national policymakers to eliminate any barriers to affordable housing. 

Creating opportunities for new construction is the only way to add inventory and boost production. Removing unnecessary costs and regulations make it possible for builders and homeowners to afford to build the American Dream of homeownership.