Wednesday is being labeled “liberation day” by President Donald Trump, as he has announced plans to implement a variety of tariffs on just about every U.S. trading partner.

But the housing industry doesn’t appear to share Trump’s zeal for duties on imported goods. Planned tariffs on Canadian and Mexican goods almost assuredly mean higher prices for homes that many experts say already cost so much they are keeping a large swath of the population out of the homeownership market.

As of Tuesday morning, the details about which tariffs will be put in place remained unclear and Trump appeared to be continuing to negotiate.

Trump has already shown a propensity for last-minute delays or changes to duties placed on foreign goods. On March 4, the president imposed 25% tariffs on all Canadian and Mexican goods entering the U.S. and raised the tariff on Chinese products to 20%. But two days later, he announced a one-month tariff delay until April 2 on all products from Canada and Mexico that are covered by the United States-Mexico-Canada Agreement (USMCA) negotiated during the first Trump administration.

But many contractors aren’t waiting for the tariffs to be implemented before raising their prices, and there is anecdotal information from home builders that construction costs are already on the rise.

Jon Paul Perez, CEO of the Related Group, a large developer involved in everything from affordable housing to luxury condominiums, told CNBC recently that subcontractors are already adding a financial cushion into their cost estimates in anticipation of looming tariffs.

“It could be as much as 20%, depending on what material they’re getting from another country,” Perez told CNBC.

Effects of tariffs on builders

The National Association of Home Builders (NAHB) has announced that if the planned tariffs go into effect, the cost of materials, including imported softwood from Canada, will rise. The NAHB/Wells Fargo Housing Market Index survey in March found that builders estimate the typical cost effect from recent tariff actions could add $9,200 to the price of each home, which is approximately 2.5% of the cost of a median-priced home. But, again, that figure is based on potentially outdated tariff levels.

NAHB estimates that of the $8.2 billion of sawmill and wood products imported last year, 72% — or $5.9 billion — came from Canada. About 30% of the softwood lumber used in home construction comes from Canada.

That wood is currently subject to a 14.5% lumber tariff previously imposed by the U.S. Department of Commerce. The Commerce Department has signaled it plans to possibly double that tariff later this year. Another 25% tariff is being proposed by the Trump administration, which would mean the overall tariff rate on Canadian lumber could rise to above 50%, and possibly approach 60%, by the end of this year.

Other raw materials, ranging from lime and gypsum from Mexico to steel and aluminum from China for making appliances, will also be subject to a variety of tariffs. NAHB estimates that new tariffs on Canada, China and Mexico are projected to possibly raise the cost of imported construction materials by more than $3 billion, depending on which tariffs end up being implemented.

Part of the reason that the Trump administration is implementing tariffs on Canadian lumber is to expand American timber production. NAHB said while it welcomes the effort to increase domestic wood production, the U.S. lumber industry does not have enough domestic capacity to meet the industry’s demand.  

But the U.S. Lumber Coalition disagrees, maintaining that lumber costs account for only 1.7% of the price of a new home. According to that alliance of lumber producers, the duties have just a 0.04% impact on home prices. They also say they can now supply 95% of the lumber home builders need.

Where the tariff negotiations stand

In a sign that last-minute negotiations may be continuing, Trump announced on Monday that he was inviting CEOs who are investing billions of dollars into new projects inside the U.S. to come to the White House and negotiate avoiding the tariffs.

“I’m certainly open to it, if we can do something,” Trump was reported as saying Monday. “We’ll get something for it.”

The administration has announced a series of duties, including reciprocal tariffs, which is the raising of tariffs on foreign goods to match what other countries impose on U.S. products. Trump has also mentioned taxing products from the European Union, Brazil, India and South Korea. Additionally, he has announced a 25% tariff on all cars and car parts being imported into the country.

Relations between Canada and the U.S. hit rock bottom last week when new Canadian Prime Minister Mark Carney said that a 25% tax on all foreign-made autos and auto parts was a “direct attack” on Canadian auto workers and that the once-close relationship between the two countries was over.

However, a few days later, the two leaders spoke by phone and Trump described the conversation as “extremely productive.” Both sides seemed to hint that negotiations were possible. But Carney said Trump did not offer to pull back on duties to Canadian steel, aluminum, autos and other products.