Trump’s new tariffs shake the US housing market

White House justification

The White House states that the tariffs aim to strengthen US industries and safeguard national security, building on a series of trade measures introduced since Trump took office. The new tariffs include 10% on softwood lumber and 25% on certain upholstered furniture and kitchen cabinets, both set to rise to 30% and 50% respectively ,from January 1. Although limited trade agreements with Britain, the EU, and Japan seek to reduce severe penalties, American consumers are unlikely to benefit from lower prices.

Industry leaders warn of higher housing prices

Buddy Hughes, Chairman of the National Association of Home Builders (NAHB), warned that these tariffs will increase housing costs at a time when mortgage rates and material prices are already putting pressure on affordability. While President Trump cited national security reasons for the tariffs, Hughes highlighted that housing is central to both the economic and physical security of Americans.

Canada hit hardest by timber tariffs

Canada, the largest supplier of timber to the US, is the most affected. The new 10% duty adds to existing anti-dumping and countervailing tariffs, bringing the total rate on Canadian wood to about 45%. The BC Timber Trade Council called the decision “misguided and unnecessary,” warning of potential job losses and greater strain on the US housing supply crisis.

Global supply chain feels the pressure

Stephen Brown of Capital Economics estimated that since 30% of US lumber is imported, the 10% tariff could raise the cost of building an average home by approximately £2,200. Major furniture suppliers, including China, Vietnam, and Mexico, which collectively account for nearly 70% of US imports, are expected to face significant financial repercussions. Vietnam, in particular, stands to lose the most, as furniture makes up 10% of its total exports to the US.

Economic implications and long-term outlook

The tariffs were imposed under Section 232 of the Trade Expansion Act of 1962, reflecting earlier measures introduced on steel, aluminium, and automobiles. Analysts warn that while the policy aims to strengthen domestic industries, it could also raise consumer prices further and worsen the housing affordability crisis. As builders, homebuyers, and economists assess the effects, it is evident that the ripple impacts of these tariffs will influence the housing market and the wider economy for years to come.