On Friday, President Donald Trump announced plans to impose a $267 billion tariff on Chinese goods, further escalating an unprecedented trade war.
The threat is in addition to the $200 billion tariff on Chinese goods the administration is considering imposing in the next few days.
The National Association of Home Builders Chairman Randy Noel believes implementation of the tariffs could potentially disrupt an already struggling residential construction industry.
"Though well-intentioned, President Trump's threat to slap an additional $267 billion worth of tariffs on Chinese goods will be counterproductive by raising costs for millions of American consumers and businesses that rely on these products, including home builders,” Noel stated.
“These tariffs would be in addition to $200 billion worth of proposed tariffs that are already in the pipeline and could act as a tax increase of up to $2.5 billion on the residential construction industry," he continued.
In August, concerns about market affordability contributed to homebuilder confidence falling to its lowest level in 2018, dropping one point to 67, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
As homes become less affordable, pending home sales have fallen for the seventh consecutive month, and existing home sales have moved at its slowest pace within the last two years. Simply, homebuyers cannot keep up with home prices that are increasing to offset building expenses.
"Currently, tariffs on steel imports and Canadian lumber shipments into the U.S. are needlessly increasing the cost of building materials and exacerbating the housing affordability crisis,” Noel said. “Rather than escalating the situation, NAHB respectfully urges the administration to move quickly to resolve these trade disputes in a manner that won't tax American workers and consumers."
Although the tariffs are yet to be implemented, the president and his administration seemed determined to make them a reality.