Tariffs and U.S. Construction

The word “tariffs” can send shivers down some people’s spines. While some may think the current administration is the first to impose tariffs on imported goods, that’s not the case. According to the National Association of Home Builders, the U.S. spent $204 billion on single- and multi-family construction in 2024, with $14 billion of that spent on imported materials.  

The NAHB also noted that the previous administration raised tariffs on Canadian lumber in 2024, from 8.05 to 14.54 percent. Tariffs, it seems, are something the construction industry has been managing for quite some time. 

A tariff is essentially a tax that a government imposes on imported goods and services. Canada remains the United States’ largest trading partner, with annual imports reaching $413 billion. In return, Canada imports $349 billion worth of goods from the U.S. The earlier tariff increase was aimed at addressing antidumping and countervailing concerns—terms used when foreign goods are priced unfairly low, or when governments subsidize industries to create an unfair advantage. 

The Current Landscape: A Universal 10 Percent Tariff 

The current administration, as of this writing, has implemented a 10 percent tariff on all imports to the United States. The primary motivation behind this move is to address trade imbalances.   

For context, the U.S. has a $63 billion annual trade imbalance with Canada. That number may seem alarming at first glance, but it becomes less so when factoring in the population difference: the U.S. has roughly 340 million people, compared to Canada's 40 million. It's impressive that Canada consumes $340 billion of U.S. goods annually, and much of what Canada imports may be used to manufacture goods that re-enter the U.S. market. 

Trade imbalances with countries accused of human rights violations or exploitative labor practices—like China—make a strong case for tariffs. Canada, however, shares similar labor protections and standards with the U.S., making broad tariffs feel less justified.   

Interestingly, some U.S. states, including Arizona and Pennsylvania, actually export more to Canada than they import. Blanket policies may hurt regions without the imbalances tariffs are intended to correct. 

Will Tariffs Really Bring Back U.S. Manufacturing? 

The media often frames tariffs as a way to restore American manufacturing. However, the U.S. construction industry is already grappling with a major shortage of skilled labor. Many subcontractors would hire trained workers immediately if they could find them—even knowing that full training can take up to four years. 

Even if new factories open, there’s little evidence that younger generations will be drawn to traditional manufacturing jobs. Automation and robotics are often touted as the solution, but many leading robotics companies are based in Asia and Europe, not the U.S. 

If tariffs are simply a negotiation tactic, they could be effective. Having worked as a labor negotiator, I recognize the strategy: set a hard line to force serious talks. The stakes, however, are enormous. This newfound unpredictability from the U.S. may worry other countries, which could ultimately work in America’s favor—or backfire. 

As Bette Davis famously said in the 1950 film All About Eve, “Fasten your seat belts, it’s going to be a bumpy ride.” Here's hoping our Canadian friends know that many Americans continue to value and appreciate them, even through these turbulent times.