President Trump’s decision yesterday to escalate the trade conflict with China could wind up imposing a $2.5 billion tax increase on residential construction at time when builders are already grappling with higher housing costs.
Trump announced he is moving immediately to impose 10% tariffs on an additional $200 billion worth of Chinese imports, including $10 billion of goods used by the home building industry. This 10% levy represents a $1 billion tax increase on residential construction. Making matters even worse, the tax hike will rise to $2.5 billion on Jan. 1 when the president said the tariff rate will jump to 25% if the two nations have not resolved their differences by year end.
Potential Outcomes
If China retaliates, Trump has vowed to place tariffs on an additional $267 billion worth of imports — a move NAHB has strongly opposed.
Responding to this action, NAHB Chairman Randy Noel issued the following statement noting the effects this will have on the housing market and urging the White House to change course:
“President Trump’s decision to impose 10% tariffs on $200 billion worth of Chinese imports, including $10 billion of goods used by the residential construction sector, could have major ramifications for the housing industry. With housing costs on the rise, this action translates into a tax increase on housing that will rise even more significantly on Jan. 1 when the tariff rate jumps to 25 percent.
“Further, this tax increase is coming on top of the current 20% tariffs on softwood lumber imports from Canada. The lumber tariffs have already added thousands of dollars to the price of a typical single-family home.
Affect on Housing
“With America facing a housing affordability crisis, it is counterproductive to enact policies that will needlessly drive up the cost of housing. We respectfully urge the administration to change course and work to resolve these trade disputes in a manner that won’t harm American businesses and consumers.”
NAHB has been leading the charge to urge the Trump administration to resume trade talks with Canada. It is imperative to find a long-term solution to this trade dispute that will ensure American home builders and consumers have access to a reliable supply of softwood lumber at reasonable prices.
At NAHB’s urging, 171 House members sent a letter to the administration in June urging the United States to re-start softwood trade negotiations with Canada.
And in another effort spearheaded by NAHB, 12 Democratic and Republican senators sent a joint letter to Commerce Secretary Wilbur Ross and U.S. Trade Representative Robert Lighthizer last week urging the administration to resume lumber trade talks and find an equitable solution that will satisfy all sides.
NAHB continues to work on all fronts to find solutions that will ensure a lasting and stable supply of lumber imports into the United States at a competitive price.
View NAHB’s analysis on how the Chinese tariffs will impact the housing sector.
For more information, contact David Logan at 800-368-5242 x8448 or Alex Strong at x8279.
source : https://nahbnow.com/2018/09/chinese-tariffs-act-as-a-1-billion-tax-hike-on-housing-could-jump-to-2-5-billion/
