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Trump’s New Tariffs Could Add $35k-to-$45k to Cost of a Home

California’s building industry is bracing for higher timber prices, with Trump slapping a 25% tariff on Canadian lumber starting Saturday.


Sun 02 Feb 25

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California’s construction industry is bracing for higher timber prices, with President Trump’s 25% tariffs on Canadian and Mexican lumber starting Saturday. It comes as Ganahl Lumber Co, the Golden State’s oldest lumberyard, is amongst a host of companies now skittish about tariffs, which could impact everything from lumber and structural steel used in offices, hospitals, and government buildings to roofing and flooring in multi-level and single-family dwellings.

“I think tariffs would have a negative impact on our industry,” said Pete Meichtry, Ganahl’s vice president of purchasing, who spoke about the potential tariffs on Thursday. “Tariffs may put a little bit of a damper on demand, just because the consumer, developers and builders, cannot absorb that much, so they would postpone projects, scale them down, or do something to offset the increase.”

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Last month, Justin Trudeau – Canada’s outgoing Prime Minister – met with Donald Trump at Trump’s residence at Mar-a-Lago in Florida to discuss tariffs. (Photo Credit: Everett Collection Inc / Alamy Stock Photo)

Whilst Trump’s move to impose tariffs will likely raise the price of imported materials (including more than the US $3 billion worth of softwood traded from Canada into the USA), the new administration argues the tariffs would level the playing field by boosting local production: “We don’t want to be alarmist because we don’t see pen to paper quite yet, but we are advising our clients that there could be challenges with tariffs, so let’s wait and see what they are,” warns Chris Fisher, the managing principal at Troy, a consultant advising contractors, home builders, manufacturers, and building product distributors.

“We also are telling them to be smart and look for alternative materials.”

Chris Fisher, a consultant to Californian construction contractors, home builiders, manufacturers and building product distributors.

Ganahl and other building executives worry the tariffs will be pushed onto consumers, which will be especially tough to stomach in Los Angeles, where communities are beginning to consider rebuilding after devastating wildfires: “Combine (the) tariffs with the fires, and this will add substantial costs to the rebuild,” according to Don Dunmoyer, the president of the California Building Industry Association.

In a worst-case scenario, Mr Dunmoyer said the tariffs could add between $35,000-$45,000 to the cost of a new home build. Mr Meichtry, whose company imports 20% of its lumber from Canada, said the tariffs’ short-term effects would be negative: “It would be a kind of a shock to the system, and people would have to regroup and figure out what the strategy is going forward,” adding that Ganahl’s remaining wood products come from Northern California, Oregon, and Washington (decimated by fires), with plywood and panels shipped from Texas and Louisiana.

Why higher lumber costs risk squeezing out construction activity…

Last week, Wood Central revealed that building costs now account for more than 64% of the price of a single-family home – the highest level for more than 30 years. And yet, despite surging labour costs, site establishments, and service rough-ins, the cost of timber frame and truss, proportional to all other costs, has dropped from 18.4% in 2022 to just 14.6% in 2024 – added to a large degree by a sharp drop in the price of Canadian lumber, down 70% from the 2021 Covid-peak.

Author

  • Jason Ross

    Jason Ross, publisher, is a 15-year professional in building and construction, connecting with more than 400 specifiers. A Gottstein Fellowship recipient, he is passionate about growing the market for wood-based information. Jason is Wood Central's in-house emcee and is available for corporate host and MC services.

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