Trump rates on Canada, China and Mexico will take effect on Saturday

Housing Main analyst Logan Mohtashami wrote on Friday that he does not suspect that rates will become a broader policy strategy for the Trump administration.

“I don’t believe we will see universal rates for the Trump term; This is all about negotiating a deal with other countries, “wrote Mohtashami. “Can we possibly see rates that are being introduced for countries with a strong arm to deals? Yes. However, this is all a short -term trick to get better deals. Trump does not want people to think he is bluffing, so he can follow his threat, but it would only be a short -term event. “

Tarif proposals have been part of the Trump agenda for some time and will influence the American housing industry, in particular due to the import of Canadian Softwood Wood. The National Association of Home Builders (NAHB) responded quickly to the announced rates on Friday in a Letter to the White House.

“Lowering the costs of homes requires a coordinated effort to remove obstacles for construction, whether it is about regulatory, labor or chain-related,” said NAHB chairman Carl Harris in the letter. “NAHB is ready to work with you to achieve these goals. However, we are seriously concerned that it represents that 25% rates for Canada and Mexico will have the opposite effect by delaying the domestic residential construction sector. “

The trade group also reported that inputs for residential construction have risen their prices by more than 30% since the beginning of 2021. Canada and Mexico account for around 25% of the building materials imported into the US

Shortly after Trump’s election in November, his proposals covered the board rates from 10% to 20%, with extra rates from 60% to 100% for China. A prediction of Pantheon Macro -economy estimated that a universal rate of 10% would increase inflation by 0.8% percentage points in 2025. And the Loaded foundation estimated That a rate of 20% would increase taxes on American households by an average of $ 2,045 in 2025.

The rates come at a time when the home and mortgage industry tries to encourage more Americans to buy and sell houses. The Federal Reserve This week a series of cutbacks ended to benchmark the interest rates, making them stable at a range of 4.25% to 4.5%.

“The break of the FED on rate cuts confirms what the Treasury revenues have told us – the inflation risks will probably keep the mortgage interest high in the short term,” Eric Oenstein, senior director at Fitch -Reviewssaid in the aftermath of the Fed decision.

Fed -chairman Jerome Powell said that he had “had no contact” with Trump about the clear wish of the president to lower interest rates. But he also said reporters that the prediction efforts of the central bank had potential rates in mind, as well as any policy with regard to immigration.

“I think we should have that policy articulate before we can even start making a plausible assessment of what their implications will be for the economy,” Powell said Wednesday. “And as we always say, this is no different than any other series of policy changes at the start of an administration. We will look patiently and have no hurry to come to understand what our policy reaction should be until we see how it is going on. “

In a profit call this week, Hilla Sferruzza, executive vice president and financial director of Meritage Homes – One of the largest residential builders in the country – said that his company had no clarity about the rate proposal.

“But as an industry we experienced extreme supply chain restrictions a few years ago and we are routinely treated with labor shortages, especially in the past decade,” said Sferruzza. “For Meritage, our all-spec strategy has been able to run and offer a replacement if the availability of products or cost problems occur.

“We have expanded our sourcing channels in recent years, especially since Covid, so we remain agile and ready to adapt to possible international trade implications.”

The Times reported that North -American car manufacturers also oppose the rates. Linda Hasenfratz, executive chairman of the Canadian car parts maker Linamar, said the outlet that the extra 25% costs could close the car production within the continent within a week.

“Nobody can absorb these types of costs, not the car manufacturers, not the suppliers, not consumers,” Hasenfratz told The Times. “The question will collapse, and the vehicle production will come to a halt, making millions of employees unemployed, the vast majority of which are in the US”

Note of the editors: This is a developing story and will be updated as more information becomes available.