President Trump’s latest

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And then there’s China. The new 20% tariff on Chinese goods includes appliances, plumbing fixtures, lighting, and a host of other home essentials. Builders will either have to absorb those higher costs, pass them onto buyers, or find alternative suppliers—none of which are easy solutions.

The Trade War’s Broader Economic Risks

The stakes go beyond home construction. If Canada and Mexico retaliate with their own tariffs, the ripple effect could hit everything from labor markets to real estate investment. Canada has already announced 20% tariffs on $100 billion worth of U.S. goods, with a second wave targeting another $90 billion in the coming weeks. China, meanwhile, has responded with its own set of tariffs, hitting U.S. agricultural products and tech components.

The broader economic risk is stagflation—a toxic mix of slowing growth and rising prices. Tariffs push up costs, which feeds into inflation, even as they create uncertainty that discourages investment and spending. If consumer prices rise too fast, the Federal Reserve may have to reconsider its rate-cut trajectory, keeping borrowing costs higher for longer—another headwind for homebuilders.

Next?

That’s the trillion-dollar question. Trump’s trade measures are rarely set in stone, and his administration has already retracted some tariff plans after industry leaders’ backlash. But for now, builders have to operate as if these tariffs are here to stay.

The next few weeks will be critical. If suppliers continue to delay purchases due to uncertainty, builders could face material shortages heading into peak construction season. The bigger concern, though, is whether buyers will start pulling back.

If interest rates drop further, as the administration is pushing for, it could help offset some of the affordability issues caused by tariffs. But if higher material costs force builders to raise prices, those rate cuts may not be enough to keep demand intact.

For homebuilders, developers, and their partners, the key takeaway isn’t just that costs are rising — it’s that they are rising unpredictably. That kind of environment makes long-term planning almost impossible. And in a business where every decision is a high-stakes bet on the future, that’s a risk few can afford to take lightly.