US President Donald Trump’s promise to Canada and Mexico during his campaign was that he would be imposing tariffs on his two closest trading partners. The justification for the tariffs comes from the “America first” approach, an attempt to get the American economy rolling better by manufacturing goods in the USA. Many Canadians have expressed their confusion with the tariffs online, being entirely unsure when the tariffs will be imposed. President Trump has waffled back and forth over when the tariffs will be imposed and which goods they will be imposed on. The one thing he has been consistent over is that he wants to impose them, he just won’t commit to it through his actions.As of March 6th, 2025, according to Global News, President Trump signed an executive order delaying tariffs on Canadian and Mexican goods that are included under the USMCA free trade agreement by a month. The United States-Mexico-Canada Agreement was signed by Donald Trump during his first term as President, back in 2018. Goods included in this agreement include agricultural and food products, such as dairy, wheat, produce, wine, poultry; automotive and manufacturing products such as cars, steel and aluminum, and machinery; energy and natural resources such as oil and gas, mining, minerals; technology such as electronics and intellectual property; and pharmaceuticals and medical products.&nbsp; According to Al Jazeera, however, “the pause does not fully cover energy products, on which President Trump has imposed a separate 10% tariff.” They also remind us that Canada is the biggest source of US oil imports. Al Jazeera also states that the US will still impose a 25% tariff on steel and aluminum on March 12. They point out that Canada supplies the US with most of its aluminum. The reasoning for the pauses, according to President Trump, is that he placed a pause on USMCA goods “out of respect” for Mexican President Claudia Sheinbaum, and he elected to extend the same exemptions to Canada under the USMCA. The pause on these exempted goods will last until April 2nd of this year.&nbsp;When we discuss housing affordability and the need to build more houses, it is critical to consider how US tariffs on Canadian raw materials, essential to the home building process, will affect our building plans. As of yesterday, CNN reports that President Trump has threatened new tariffs on lumber, saying he could impose them as early as Monday or Tuesday. President Trump said the US can do without Canadian lumber, but the US gets 30% of their lumber from Canada today. CNN specifically notes how lumber tariffs will threaten housing affordability as they will increase lumber and building costs, therefore increasing housing price for homeowners and by extension renters. CNN specifically states that “economists &amp; homebuilders caution that America does not currently have the industrial capacity to meet the demand and that placing a tariff on Canadian lumber imports could further exacerbate the ongoing housing affordability crisis. Lumber is not the only building material that will burden the housing market. Tariffs on steel and aluminum, expected to hit on March 12,&nbsp;CTV states that the total steel and aluminum exports from Canada last year were worth $35 billion, 1% of GDP. Out of the $7.8 billion of lumber Ontario alone exports, 97% of that goes to the United States. The US is a major customer in both industries, and a 25% tariff will make transactions billions of dollars more expensive.The imposition of tariffs on essential building materials obviously will have the direct impact of making housing more expensive, but they also damage the economy in a way that will have negative ripple effects. Kevin Lee, the Canadian Home Builders Association, states that “a slowing economy invariably means slowing housing starts, which will have expansive repercussions on housing supply, our industry, and long-term affordability.” The Canadian Home Builders Association also states that the tariffs on many goods “will drive up costs for consumers, erode housing affordability, &amp; negatively impact the economy in both countries, further limiting purchasing power for housing and no doubt slow housing starts,” especially at a time when the need to increase the housing supply to combat affordability has become critical. They remind us that increasing the cost of essential construction materials means it’s more expensive to build housing, inevitably passing on the additional costs to homebuyers.With these challenges, it is understandable that the market is nervous. However, they also indicate that the existing housing stock has great support and that buyers would be wise to consider the bargains that are available out there today. It is unlikely that new builds will provide similar value.The extent that the tariffs were personal will be tested this week. Justin Trudeau has finally stepped down and a new leader will take his place this week. We may see the Trump Whitehouse take a more cooperative tone with Canada. If not, we can only hope for a quick election to help rebuild our future.

Tariffs, Trade & Housing: What Trump’s Moves Mean for Canada

Trump’s tariffs on Canadian materials could drive up housing costs. What does this mean for affordability, supply, and future builds? Let’s break it down.

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