Uncertainty Reigns as 'Liberation Day' on Tariffs Approaches
President Trump has hailed April 2 as “Liberation Day,” when he said he will announce global tariffs that could have far-reaching ramifications for the residential construction industry.
The president has announced he will impose “reciprocal tariffs” on all nations on April 2, meaning the U.S. will match import duties that other countries impose on American goods. There is currently no procedure in place for how the tariffs will be implemented.
Trump also announced that on April 2 he will impose an additional 25% tariff on all Canadian and Mexican goods entering the U.S. This is in addition to the global reciprocal tariffs.
It is uncertain whether the 25% tariffs on all Canadian and Mexican goods will take effect on April 2. The president has announced these tariffs previously, only to delay implementing at the last minute and extending 30-day deadlines for negotiations to continue with our closest trading partners.
The tariff situation remains highly volatile, and NAHB will provide updates as new information becomes available.
Additional Actions on Lumber
The U.S. imported just over 11.8 billion board feet of softwood lumber from Canada in 2024. With softwood lumber a primary component in home building, the tariffs have already increased price volatility on softwood lumber as prices have risen 12.7% since the end of 2024.
The proposed 25% tariff on softwood lumber products from Canada is in addition to an effective combined 14.5% countervailing (anti-subsidy) and anti-dumping duty rate already in place, meaning that the overall effective Canadian lumber tariffs will rise to nearly 40% if Trump acts against Canada and Mexico on April 2.
The 14.5% countervailing and anti-dumping duties are currently under review by the Commerce Department, and it is expected that these duties could double to roughly 30% by this fall. Adding in an additional 25% tariff on all Canadian products would boost the overall tariff on Canadian lumber well north of 50%. Keep in mind that 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.
Moreover, Trump recently ordered a new national security probe into global lumber imports, which may add significantly to U.S. lumber tariffs. NAHB on March 31 filed a comment letter with the Department of Commerce arguing that housing is a critical component of national security and that no further lumber tariffs should be imposed in the name of national security.
The Impact of Tariffs on Home Building
Tariffs on building materials act as a tax on American builders, home buyers and consumers. Builders estimate an average cost increase of $9,200 per home due to recent tariff actions, according to the March 2025 NAHB/Wells Fargo Housing Market Index.
Of course, the effects of the tariffs on the housing industry go far beyond Canadian lumber. For example, 70% of the imports of gypsum, which is used to make drywall, comes from Mexico. The U.S. also imports nearly $500 million worth of gas ranges from Mexico annually.
Costs will also rise for steel, aluminum, copper, home appliances and scores of other building materials sourced outside of the U.S. NAHB estimates that approximately 7.3% of all goods used in new residential construction originated from a foreign nation in 2024.
The tariffs are not only expected to raise the cost of building materials — which are up 34% since December 2020, far higher than the rate of inflation — but also wreak havoc on the building material supply chain. In turn, this will put even more upward price pressure on building materials.
What is NAHB Doing?
In addition to the comment letter to the Department of Commerce, NAHB has urged the president to reconsider his directive to impose tariffs on Canadian, Mexican and Chinese goods, given the long lead time and significant production capacity needed to create additional domestic supply.
For years, NAHB has been leading the fight against tariffs because of their detrimental effect on housing affordability. NAHB has taken several actions to roll back tariffs and to boost domestic production of softwood lumber:
- On March 5, NAHB Chairman Buddy Hughes met with U.S. Trade Representative Jamieson Greer to discuss how tariffs on building materials will drive up the cost to construct homes and harm housing affordability.
- The day before, Hughes spoke on the same topic while testifying before the House Financial Services Subcommittee on Housing and Insurance regarding the need to increase America’s housing supply.
- NAHB Chief Advocacy Officer Ken Wingert and Senior Federal Legislative Director Alex Strong met with Quebec Premier Francois Legault and other top Canadian officials on Feb. 11 at the Canadian Embassy in Washington. Wingert told Legault the U.S. needs Canadian lumber and that NAHB supports Canadian efforts to reach a new trade agreement between the two nations that is fair, equitable and would eliminate tariffs.
- NAHB sent a letter to the White House on Jan. 31 urging the president to exempt critical building materials from his proposed 25% tariffs on Canadian and Mexican goods.
- With NAHB’s strong backing, the House in late January passed the Fix our Forest Act, legislation that would contribute to better forest management practices, help strengthen the nation’s housing supply chain and promote affordable housing opportunities for all Americans.
- NAHB has been actively getting our message out to the media on the issue of tariffs. NAHB CEO Jim Tobin has been interviewed by several broadcast outlets, including CBS News, CNN, Fox Business Network and Yahoo Finance TV. NAHB spokespeople have also been quoted in The Wall Street Journal, CNN, The New York Times, CNBC, Barron’s, Bloomberg, The Washington Post, Associated Press, Business Insider and other notable news organizations.
Moving forward, NAHB will continue working with all relevant stakeholders to roll back tariffs on building materials, boost sawmill production and increase the domestic supply of timber from federally owned lands in an environmentally responsible manner to help fix building material supply chains and ease costs.