The White House tariff is expected to continue with a 50 percent on imported and aluminum steel to throw “consumer and construction feelings” in the United States. Newsweek.
Building activities in the country have slowed in the recent months that followed the president Donald TrumpA comprehensive tariff for decisive materials such as steel, aluminum, soft wood and wood, where the builders are preparing for higher and weakest prices. The new customs tariffs will exacerbate this phenomenon – with severe consequences for the fragile American housing market.
“It is possible that the increasing production costs will be transferred to the home buyers, which may harm the housing request,” said Jones. “As is the case, many buyers are marginalized due to the high housing costs. Anything that increases the ability to withstand costs can pay the demand for the buyer even.”
Why do it matter
When the historically low mortgage rates ignited madness in homes during the epidemic, the United States was facing a chronic shortage of inventory because the builders did not build a sufficient amount of homes to meet the demand in the years that followed the 2008 financial collapse. This deficiency contributed to the payment of home prices through the ceiling, as buyers had to struggle for limited lists.
Inventory finally chose this year, as the lists grow all over the country, even with the ability to withstand costs, giving buyers more options and negotiation power. However, the high costs of builders can lead to a decrease in construction activity, the cancellation of recent progress and the maintenance of prices – contrary to what Trump promised during his 2024 presidential campaign.
What do you know
On Wednesday, it entered into force by 50 percent on aluminum and imported steel, one day after Trump signed an executive order that doubles the fees on the sectors-an increase announced, but many hope that there is no into effect.
Customs duties will reach supplies from European UnionCanada, Mexico, Brazil and South Korea – which the United States imported from steel and aluminum last year – but not from the United Kingdom, which gave an exemption.
The current definitions, which aim to encourage investment in domestic production and depend on these materials, have already been affected by increasing concerns about the impact of definitions on the American economy.
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“Economic uncertainty, potential changes in building materials prices,” said Jesse Wadi, an economist for taxes and trade in the National Association for Home Builders (NAHB). Newsweek.
“In our last HMI [House Market Index] He said that the survey, we asked builders about the impact of definitions on their work.
The poll found that on average suppliers increased their prices by 6.3 percent in response to the definitions announced, or the expected years. “This means that the builders appreciate the effective cost effect of the recent tariff procedures on $ 10900 per home,” Wadi said.
The higher definitions can exacerbate the constant challenges of builders. “This will lead to the high prices of goods that require steel and aluminum. It will lead to project planning and the cost of problems for builders.” “Home appliances that require steel inputs and other structural materials that create higher costs for builders and families in general.”
It is very likely that the tariffs of 50 percent of steel and aluminum will exceed the costs of solid manufacturers, project owners and subcontractors, who are highly dependent on these materials. Newsweek.
He said: “With all industries in contact, these definitions may merge very well across sectors, increase infrastructure costs, commercial projects, and more.”
“Manufacturers face compressed margins, while those with risks risk abuses, threatening the project’s authority. Contractors will face subconscious, and they are often in fixed price contracts, short -term financial pressure when customs duties arrive. The costs will eventually transfer to consumers, and amplify the price of final projects.”
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Will customs duties raise home prices?
Chen Zhao, head of Economy Research at Redvin, said, said Redvin, Newsweek The additional definitions will increase the cost of building a house and paying prices to buyers, but how much will happen and when it will happen.
“Since the definitions have moved a lot, exporters, importers, or builders may temporarily take costs, in the hope that they will disappear quickly. But if they live, they will have to pass the costs to the bottom of the line at some point,” said Zhao.
Jones said: “The high tariffs are likely to raise steel and aluminum the cost of the main building materials, and these costs added to the home buyers can be transferred through the high prices of homes,” Jones said.
She added: “It can also hinder the increase in the costs of inputs, which limits the multi -family family construction, which limits future rental supplies and may push the rents up in the areas facing low rent.”
Zhao said that the transfer cost of the Trump administration’s tariff to buyers may mean “fewer transactions that occur more than that.”
This may be bad for the American housing market, which is already facing severe sales due to high mortgage rates and high housing costs, making potential buyers on the margin.
But it is not certain how the builders will respond to the definitions. “Do they simply build less or try to increase the cost of the homes they sell?” Zhao said.
Building fewer homes may lead to the United States to restore the chronic shortage of stock that has contributed to the payment of prices across the roof in the past few years, despite the recent progress in the number of lists available in the market, which leads to pressure on prices.
Jones said: “The high housing costs will exacerbate the ability to withstand housing costs at a time when many buyers are already marginalized, which may reduce the demand and slow construction more than that,” Jones said.
Zhao said that estimating the actual increases in the cost related to tariffs in the coming months may be a challenge, “because the market weakens and the prices are likely to start a little declining.” “In this case, the definitions can still increase the prices, because this means that the prices would have decreased more without the definitions.”
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Will the United States produce enough locally?
Nowadays, Jones said, US local manufacturers lack the ability to meet the boom in demand that will arise from replacing imports with product materials locally.
She said: “Although it is possible to expand the scope of local production, build new facilities, or increase production from current regions, it will take great time and will not provide short -term comfort,” she said.
“Although the administration may seek to obtain new commercial agreements to alleviate some negative effects, the future view is still unconfirmed. In the short term, the basic impact of definitions is likely to be the highest costs of builders and thorny houses.”
According to Zhao, the increase in domestic production of steel and aluminum is possible, “but it takes some time to increase production.” “There may be a lack of experience and work, so it takes time to fill these gaps.”
Will the tariffs remain in place?
At the present time, the uncertainty in the implementation of the customs tariff, “given the history of the administration in proposing a high tariff only to re -negotiate, the complexity of the budget and planning” of the buildings, although the gradual approach to implementing the tariff may lead to suddenly reduced. “
According to Jones, it is possible to define a tariff on steel and aluminum “they will not fall at the present time.”
Jones said that the Trump administration “may explore more commercial deals to reduce the influence on the affected industries, but it is not clear exactly how things will feel.”
“All this depends on the goals of the White House, as well as how the judicial system views the justification of these definitions,” said Zhao. However, she added: “The sectoral or product tariffs are likely to be adhered to instead of the country’s tariffs because it depends on the legal justification that is less in the question.”
Robert Dietz, Senior Vice President and Economist at the NAHB Comeful Society, said, said Newsweek If the new definitions will be reduced or restored, it will depend on the “local industry response”.
For Shaugnessy, contractors may be able to alleviate the risk of customs tariffs by including strategic contract provisions, such as the conditions for escalating the cost of materials to control the tariffs after the contract, the requirements of a fair notification to report the cost in time, and the arrangement of change in customs tariffs with clear documents.
He said: “The covers can balance the adjustments to the risks, while the common savings items to reduce the tariff enhance cooperation. Continuous sources – early prices or explore alternative suppliers – protect projects from fluctuations.”
He added that the implementation of the gradual tariff applied monthly, as some call, “would allow contractors and subcontractors, and they are often imprisoned in contracts, to better manage price adjustments, and reduce disturbances while supporting long -term policy goals such as strengthening the economy and addressing trade issues.”
