NAHB: Latest tariff increases will hurt housing
WASHINGTON – Sept. 20, 2018 – The Trump administration imposed more tariffs – $200 billion worth – on Chinese goods this week, and homebuilders say this latest round of tariffs could greatly affect the costs of housing construction.
The levies will go into go into effect Sept. 24. The tariffs will start at 10 percent and then increase to 25 percent on Jan. 1.
"President Trump's decision to impose 10 percent tariffs on $200 billion worth of Chinese imports, including $10 billion of goods used by the residential construction sector, could have major ramifications for the housing industry," says Randy Noel, chairman of the National Association of Home Builders (NAHB). "With housing costs on the rise, this action translates into a tax increase on housing that will rise even more significantly on Jan. 1 when the tariff rate jumps to 25 percent."
Noel says that the increase comes in addition to a current 20 percent tariff on softwood lumber imports from Canada that "have already added thousands of dollars to the price of a typical single-family home."
The Trump administration has been imposing tariffs to pressure China to change its longstanding – and what it feels is unfair – trade practices with the U.S. A Foreign Ministry spokesman is reportedly in talks to help settle the dispute, The New York Times reports.
The potential tariff impact to the housing industry also comes on the heels of another report that a labor shortage within the building industry is prompting homebuilders to rise their home prices. Economists have been calling for homebuilders to build more housing because tight inventories of for-sale homes plague many markets.
Source: "DealBook Briefing: Trump's Trade War Finally Hits Consumers," The New York Times (Sept. 18, 2018) and National Association of Home Builders
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