Trump’s Steel, Aluminum Tariffs to Hammer Homebuilders

President Donald Trump is making good on a plan to tax foreign steel and aluminum imports by 25 percent, casting a pall over the homebuilding industry.

Trump announced the tariffs this week, the Wall Street Journal reported, which are expected to hit allies Canada, Mexico, Japan and South Korea. The tariffs are expected to go into effect on March 12, about a week later than initially anticipated.

American steel manufacturers immediately saw a stock bump after the tariffs were announced, but the long-term consequences pose a difficult period for the homebuilding industry.

Domestic manufacturers and builders will see an increase in input costs as a result of the tariffs. In turn, goods will be more expensive for consumers, including homes.

Trump has been on a tariff tear during the first few weeks of his second term. He instituted additional 10 percent tariffs on Chinese goods and nearly put a 25 percent tariff on goods from Mexico and Canada, before pulling back at the last second.

Canada is the United States’ top foreign supplier of aluminum and steel, according to the Associated Press, while Mexico ranks third among steel suppliers.

Canada provided 70 percent of the United States’ imported wood in 2023, while 71 percent of imported lime and gypsum came from Mexico, according to a National Association of Home Builders forecast reported by Inman.

During his first administration, Trump placed a 25 percent tariff on steel and a 10 percent tariff on aluminum, leading to retaliation from trade partners. The tariffs boosted U.S. steelmakers, but harmed downstream businesses to the tune of billions of dollars.

The tariffs also add to the concerns about inflation, which will further harm American homebuilders and consumers who are looking to buy, rent or simply keep the lights on.

— Holden Walter-Warner