On April 2, President Trump announced a sweeping round of tariffs against the country’s global trading partners through the use of reciprocal tariffs. The plan also includes a baseline 10% tariff on all imports entering the U.S., with additional tariffs levied on a country-by-country basis.
The White House also indicated tariffs in place on Mexico and Canada were not affected by the reciprocal tariffs. As a result, products not subject to the U.S.-Mexico-Canada trade agreement will still face 25% tariffs. The exemptions are viewed as a positive development for the home building industry.
“No incremental tariffs on Canada and Mexico are a net ‘sigh of relief’ for lumber, which is trading down $50 lower than a day ago,” says Todd Tomalak, principal, advisory of building products for Zonda.
The NAHB and National Lumber and Building Materials Dealer Association (NLBMDA) applauded the exemptions for Canada and Mexico, with both calling it a major victory for the home building and lumber industries. Efforts from both organizations have highlighted the impact of additional softwood lumber tariffs on housing affordability in particular. Canada accounts for roughly 85% of all U.S. softwood lumber imports and accounts for nearly a quarter of the available supply in the U.S. while Mexico contributes a significant portion of U.S. gypsum, concrete, and appliance imports.
“While the complexity of these reciprocal tariffs make it hard to estimate the overall impact on housing, they will undoubtedly raise some construction costs,” NAHB chairman Buddy Hughes said in an official statement. “However, NAHB is pleased President Trump recognized the importance of critical construction inputs for housing and chose to continue current exemptions for Canadian and Mexico products, with a specific exemption for lumber from any new tariffs at this time.”
Canadian lumber is still subject to a 14.5% anti-dumping rate and NAHB chief economist Rob Dietz expects the rate will approach nearly 30% by the end of the summer.
“With building materials, we are in the midst of a reset of tariffs policy. Every day brings changes,” Dietz says. “We’ve estimated that for the tariffs under active discussion, per single-family home a cost impact of approximately $9,000. That’s a moving target because prices are going to adjust and trade flows are going to change availability.”
The Impact of Tariffs on Home Building
The NAHB estimates approximately 7.3% of all goods used in new residential construction originated from a foreign nation in 2024. The previously announced tariffs, as well as the reciprocal tariffs, likely mean the cost of steel, aluminum, copper, home appliances, and a variety of other building materials sourced outside the U.S. will increase.
“Our preliminary calculations indicate that the reciprocal tariffs announced April 2 incrementally drive an extra 180 basis points to building material costs vs. prior tariff announcements, which means builders should expect between 7 to 14% higher costs for sticks and bricks in 2025,” says Tomalak. “Appliances, window and door components, and furniture are hit the hardest by these latest tariffs due to where their upstream components are sourced.”
According to the NAHB, following short term volatility in prices, builders will experience reduced building material availability in the long run. The tariffs likely will also impact the building material supply chain which, in turn, will put more upward pressure on prices.
The impact of reciprocal tariffs are expected to hit suppliers and supply chains in Asia particularly hard, according to the NAHB. Chinese goods will be subject to a reciprocal tariff rate of 34% in addition to the 20% tariff already levied on Chinese imports.
