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In a sweeping action, the Trump administration has adjusted the tariff rates for more than 65 of the country’s trade partners to rebalance global trade in favor of U.S. workers and industries.
The new tariffs are expected to take effect on Aug. 7, 2025.
President Donald Trump claimed that, based on information and recommendations from various senior officials, there has been a continued lack of reciprocity regarding the United States’ trading relationships that must be rectified.
“For example, some trading partners have agreed to, or are on the verge of agreeing to, meaningful trade and security commitments with the United States, thus signaling their sincere intentions to permanently remedy the trade barriers that have contributed to the national emergency declared in Executive Order 14257, and to align with the United States on economic and national security matters,” he said in a statement on July 31.
On Friday morning, the Dow Jones Industrial Average fell more than 500 points—which signifies a decline in the prices of the 30 largest U.S. companies included in the index.
This decrease in stock prices reflects concerns over the trade war, the president’s proposed tariffs, and lackluster earnings reports from notable companies. The S&P 500, which monitors the biggest U.S. companies, dropped 1.5%.
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Adjusted tariffs rates hike real estate costs
Although Trump told NBC News that the tariff process was going “very well, very smooth,” many industries remain rattled by the taxes—including the housing market.
The cost of building materials such as softwood lumber and distribution transformers is included in the long list of imports being taxed. As these items become more expensive, the cost to build homes endangers an affordable housing market.
Tariffs on building materials would raise the cost of housing—driving up rates for consumers.
“For most goods, the cost is passed on to the end users, meaning consumers,” says the National Association of Home Builders. “So tariffs on building materials and home appliances raise the cost of housing, and consumers end up paying for the tariffs in the form of higher home prices and goods.”
Steel, aluminum, and wood are all subject to Trump’s latest tariffs. Builders, real estate agents, and prospective buyers are still waiting to see how the dramatic increases, layered costs, and supply changes will affect the housing industry.
Specifically, the increase in tariff rates on Canada from 25% to 35% will greatly affect building costs in the United States, considering Canada accounts for roughly 85% of all U.S. softwood lumber imports, according to the NAHB.
“The most impactful new tariff to the housing industry is the one that was just raised to 35% on Canada,” says Joel Berner, senior economist at Realtor.com®. “Tariffs on Canadian lumber, a major input to new-home construction in the U.S., had already been high, but this blanket increase will be even more detrimental. The cost of new construction will go up, leading to increased home prices and diminished inventory across the board.”
Trump and his Commerce secretary will be monitoring the tariffs and making adjustments as they see fit.
“The Secretary of Commerce and the United States Trade Representative shall inform me of any circumstance that, in their opinion, might indicate the need for further action by the President,” the statement issued on Thursday says.
Berner notes that, with the tariff changes, homebuyers will have fewer homes to choose from at higher prices, a continuation of housing issues they’ve been facing in recent years.
“American homebuyers are already struggling with affordability challenges, and this will only exacerbate the problem,” Berner adds.