President Donald Trump’s new 25 percent tariffs on steel and aluminum imports from Canada and Mexico threaten to make the U.S. housing shortage even worse and cause housing prices to soar, Democrats and industry experts warned Wednesday.
Trump announced the dramatic new global tariffs Monday, but has delayed new tariffs on products from Mexico and Canada for a month while the president considers his next steps. Canada is the largest source of imported steel in the U.S.
Representative Jim Costa of California wrote to the president on behalf of 44 House Democrats urging Trump to reconsider the tariffs on America’s closest neighbors after warning the tariffs could “exacerbate the nation’s housing affordability crisis, drive up consumer costs, and slow down the construction of new homes.”
Costa noted that the U.S. imports billions worth of building materials every year.
“Given the severe housing shortage, compounded by rising construction costs, persistent supply chain disruptions, and an estimated shortfall of 6 million homes, these looming tariffs, while intended to protect domestic industries, risk further exacerbating the housing supply and affordability crisis while stifling the development of new housing,” Costa wrote in the letter shared in a post on X.
The letter, first reported by the Guardian, urged Trump to reconsider hitting Mexico and Canada in particular with the tax to “ensure that the escalating costs do not further restrict the development of affordable housing for American families.”
Costa cited analysis from the National Association of Home Builders that suggested Trump’s proposed tariffs on China, Canada and Mexico are projected to raise the cost of imported construction materials by up to $4 billion.
The association said that the tariffs are in effect a “tax on American builders, home buyers and consumers.”
Americans are the ones who will pay the price, the association noted. “Tariffs on building materials raise the cost of housing, and consumers end up paying for the tariffs in the form of higher home prices,” the NAHB warned on its website.
Beyond the tariffs on steel and aluminum, the overall tariffs on Canadian lumber would rise to nearly 40 percent because of a 14.5 percent duty already in place, the association noted.
Yesterday top Canadian lawmaker Chrystia Freeland, who resigned last month as Prime Minister Justin Trudeau’s deputy and finance minister, retaliated by vowing “surgical” reprisals to the tariffs.
Freeland, who is running to be the next leader of the Liberal Party and prime minister of Canada, said that if forced to do so, the nation will “inflict the biggest trade blow that the United States has ever endured.”
The NAHB is calling for the Trump administration to allow a tariff exemption for building materials.
Costa’s letter ends by calling on Trump to “shield American families from escalating housing costs.”
A White House spokesperson told the Guardian that Trump’s tariffs would “usher in a new era of growth and prosperity.”
“In his first administration, President Trump instituted an America First economic agenda of tariffs, tax cuts, deregulation, and an unleashing of American energy that resulted in historic job, wage, and investment growth with no inflation,” said spokesperson Kush Desai. “In his second administration, President Trump will again use tariffs to level the playing field and usher in a new era of growth and prosperity for American industry and workers.”
The tariffs are currently due to come into effect on March 4.
