Trump tariffs could cause construction costs to rise in New Jersey, across US

Tariffs imposed on materials imported into the United States by President Donald Trump have already caused construction costs for new homes to rise, both in New Jersey and across the country.

If  Trump’s trade barriers continue in place, the costs of construction materials could rise even higher, according to a report from the Canadian Chamber of Commerce’s Business Data Lab. The Chamber of Commerce, which represents Canadian business interests, warns: “Policymakers often frame trade restrictions in geopolitical terms, but the downstream impact on U.S. households is immediate and material. While Canadian exporters may be the ones targeted, American builders and buyers are absorbing the costs. If affordability is a U.S. priority, this should be a red flag.”

The report found that between 2018 and 2024, tariffs and duties on imported construction materials have added $6,000 to the cost of building a single-family home in the United States.

According to the report, if current tariffs and duties remain in place, the number could rise by another $14,000 through 2027.

Rudolph Leuschner, a professor of supply chain management at Rutgers University, said that while the tariffs Trump has imposed so far during his second term haven’t had a massive impact on construction costs yet, that is likely to change by this fall if they continue.

Tariffs on goods imported from Canada are a major part of this probable increase in costs, but other countries factor in as well, he said: “Obviously we do import a fair bit of lumber from Canada, but we also produce a lot domestically. But when it comes to other products, for example, screws, nails, possibly some equipment, that is much more import-dependent.”

The reason prices haven’t spiked massively yet, he said, is because of existing stockpiles of necessary materials: “We’re still in a phase, however, where a fair bit of product was either brought into the country before the tariffs actually were announced, or during the pause. So I don’t know if that was by design, but there was this lull of a few months where, if you played your cards right, you were able to bypass them completely.”

Lumber used in the U.S. construction industry is largely sourced from Canada, with 69% of all lumber imported into the United States coming from north of the border, according to the Canadian Chamber of Commerce report. It’s the sort of product that is not as immediately affected by sudden price increases as others, Leuschner said.

“We’re still kind of limited in the impact, and that 90-day pause really pushed the deadline,” he said. “I think before it, my prediction was mid- to late summer, so July, August. That pushed us at least into September, if not October. Construction materials in general are also those types of goods where — you typically go on a lumber yard and they tend to have pretty decent inventory just sitting around. It’s not a supply chain that is very much operating on a just-in-time basis. So in specifically looking at tariffs, the impact is not too great at this moment.”

Again, though, the erratic nature of the Trump tariff regime makes future impacts difficult to predict.

“Things could change completely, and all bets could be off,” Leuschner said.

Canada also is a major source of other U.S. construction materials: 25% of imported iron and steel and 18% of imported refined copper originate in the country.

Trump’s policy of tariffs on imports from the United States’ northern neighbor has been all over the place in the last several months.

Shortly after taking office, the president announced 25% tariffs on most products from Canada and Mexico to take effect in early February, then delayed the start date until March 4.

Days later, on March 7, the Trump administration implemented an exemption for Canadian products compliant with the United States-Mexico-Canada Agreement negotiated by the first Trump administration.

On March 12, the administration implemented 25% tariffs on all steel and aluminum imports from all countries, including Canada.

On April 3, the administration put 25% tariffs on all auto imports, including from Canada.

On June 4, 50% tariffs on all steel and aluminum imports went into effect.

Now the Trump administration is threatening Canada with an Aug. 1 deadline for making a deal to avoid 35% blanket tariffs.