Trump lumber tariff threat is latest headache for homebuilders

Axios

03-03-2025

The Trump administration will investigate whether to slap tariffs on lumber imports on the grounds of national security, raising the risk of higher costs for the construction industry and homebuyers.
Why it matters: It is the latest economically critical input — including steel, aluminum and copper — to get swept up into President Trump's trade war in an effort to boost domestic industry.
A senior White House official said it is not certain whether the Commerce Department, which will carry out the investigation under Section 232, will ultimately impose tariffs.
The official told reporters that these tariffs would be additive to others threatened by Trump.
For instance, the White House plans to impose across-the-board 25% tariffs on imports from Canada — the largest supplier of lumber to the U.S.
Threat level: The administration says the investigation would determine whether foreign governments were dumping cheap lumber onto U.S. shores.
If tariffs move ahead, it could make it more expensive, for example, for California to rebuild after destruction from the Los Angeles wildfires.
Flashback: Soaring lumber prices were a poster child of the inflation shock. Shortages of the building material slowed construction and put upward pressure on home prices.
In 2024, the Biden administration nearly doubled tariffs on imports of Canadian softwood lumber to 14.5%.
State of play: The homebuilding industry has previously warned that raising tariffs further would have a "harmful effect" on housing affordability — most recently earlier this year, before Trump postponed 25% tariffs on Canada and Mexico.
"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," the National Association of Homebuilders, a lobbying group, said in a statement in January.