HousingWireHousingWire
President Donald Trump’s global tariff rollout has become a rollercoaster.
A week after announcing a new tariff regime that imposed dramatic levies on America’s most reliable trade partners, Trump posted on social media Wednesday that he’s placing a 90-day pause on tariffs against 56 countries and the European Union.
However, he’s raising the tariff rate on a critical trade partner for homebuilders — China. That levy is now an astronomical 125%, effective immediately.
Trump and China are engaged in an escalating tit-for-tat. Last week’s “Liberation Day” tariffs added 34% to the already 20% Trump placed on China at the beginning of his term. China responded with a 34% tariff on the U.S., and the two parties exchanged 50% levies on Tuesday.
The situation is a nightmare for homebuilders. According to the National Association of Home Builders (NAHB), 27% of imports used in residential construction come from China, and a John Burns Real Estate Consulting (JBREC) study conducted prior to Wednesday estimated that the tariffs will add $12,800 to the cost of building a home.
China provides significant amounts of hardware, appliances, glass and plumbing fixtures for homebuilders.
Stock markets — which had shed trillions of dollars in response to last week’s tariffs — reacted to the pause with jubilation. As of Wednesday afternoon, major indexes were up between 5% and 9%.
Despite the news being less than rosy for homebuilders, their equities were up between 5% and 7%.
Chinese president Xi Jinping has stated that his administration won’t back down from the trade war Trump has instigated, but he might be more likely to blink first given the ferocity of Trump’s attacks and the fact that China is more reliant on exporting to the U.S. than the other way around.
According to USA Trade data compiled by Axios, the U.S. exported goods worth $143.5 billion to China in 2024, a far cry from the more than $400 billion China exported to the U.S.
In his social media post Wednesday, Trump said that the countries subject to the pause have engaged with the U.S. in trade negotiations. China has yet to do so.
Tariffs that impact homebuilders aren’t limited to those imposed on individual countries. He previously placed a 25% tariff on all steel and aluminum products, and he’s threatened numerous times to put a tariff on lumber from Canada, which provides 73% of all U.S. sawmill wood imports.
NAHB has requested from the Trump administration a tariff exemption on building materials, but that request has yet to be granted.
