CHARLOTTE, N.C. (QUEEN CITY NEWS) — President Donald Trump is pausing new tariffs on goods from Mexico and Canada for a month.
Charlotte-area homebuilders are breathing a sigh of relief because many of the resources they use to construct houses come from those two countries.
Alan Banks is the CEO of Keystone Custom Homes in the Carolinas. He said about 70% of the lumber used for home construction comes from Canada, and a lot of the material used to make drywall comes from Mexico.
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“I knew immediately it was going to have a dramatic impact on housing affordability, which is already a huge problem both here in the Carolinas and across the country,” he said.
Banks had concerns when he learned about the 25% tariffs Trump imposed on imports from Mexico and Canada.
“We just made a huge problem worse,” said Banks.
Fortunately, the tariffs are on hold for now. But it sparked conversation about what would happen if they’re eventually implemented.
“The homeowner is going to wind up paying for it in terms of an even higher home price,” said Banks.
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Banks told Queen City News there’s already a 14.5% tariff on softwood lumber from Canada. That means if Trump were to levy the tax, it would add up to nearly 40%.
“We import from Canada about $6 billion worth of softwood lumber, 2x4s, 2x6s, the very lumber in our houses,” he said. “We just added $1.5 billion to the annual cost of that, and that’s got to be paid somewhere.”
On top of that, builders get much of the gypsum used to make drywall from Mexico. It would also be subject to a 25% tariff if leaders can’t find a permanent deal to secure the border.
The good news for Banks is the extra tax is on hold for at least the next 30 days.
“We need more homes,” he said. “The entire United States is underbuilt for new homes. Making new homes more expensive through a tariff really isn’t solving housing affordability.”
You may wonder why builders source these products from other countries. Banks said we can’t grow enough lumber in the U.S. to meet demand for building houses. As for gypsum, some of it is mined in America but, again, we can’t mine enough to keep up.
