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Chinese Tariffs Could Translate to a $1 Billion Tax on Housing Materials

Increases in material costs and labor shortages raise worries about housing affordability

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Our local and national real estate markets have been experiencing high demand for housing, but affordability has been a challenge, with increasing costs for materials and land, labor shortages to build those houses, rising interest rates, increased regulations and fees—and now, trade skirmishes that will likely exacerbate the housing affordability crisis.

The National Association of Home Builders estimates about 600 products covered by the new tariffs are related to new housing and construction and represent about $10 billion in goods. This is estimated to translate into an increase of $1 billion in housing costs from the 10 percent (initial) tariffs which started Sept. 24. The tariff rate will increase to 25 percent on Jan. 1, 2019. These costs are in addition to the 20 percent tariffs imposed on Canadian lumber imports.

The NAHB would like to see the tariffs released and for the Trump administration to find a way to resolve trade skirmishes that does not hurt businesses and consumers. It does seem counterproductive to enact policies that increase the price of building materials in a housing market that is in an affordability crisis.


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