Investors reacted harshly to President Donald Trump’s sweeping global tariff policies, sending stocks tumbling in after-hours trading Wednesday, with losses continuing today when U.S. markets opened.
But the mortgage industry appears to be still assessing the impact of Trump’s tariff policies, with several organizations contacted by Scotsman Guide either not immediately responding or declining to comment.
Buddy Hughes, chairman of the National Association of Home Builders (NAHB), offered a measured response in a statement published Wednesday.
“While the complexity of these reciprocal tariffs makes it hard to estimate the overall impact on housing, they will undoubtedly raise some construction costs,” Hughes stated. “However, NAHB is pleased President Trump recognized the importance of critical construction inputs for housing and chose to continue current exemptions for Canadian and Mexican products, with a specific exemption for lumber from any new tariffs at this time.”
While Trump announced a 10% baseline tariff on imported goods and higher reciprocal tariffs on a host of countries, Canada and Mexico were not included. The Trump administration said Wednesday that Canadian and Mexican goods that are compliant with the U.S.-Mexico-Canada Agreement will continue to be tariff-free, according to The Wall Street Journal.
The equity markets seem to be judging the new tariff policies with concern. The Dow Jones Industrial Average opened 2.9% lower on Thursday, with the S&P 500 falling 3.1% and the Nasdaq off 4.6%.
Economists at Wells Fargo estimate that about 80% of U.S. imports will be subject to tariffs following the Trump administration’s latest policy changes. Wells Fargo projects that the trade-weighted effective tariff rate in the U.S. will reach 24% because of the new tariffs. By comparison, that rate was under 3% last year.
“Ultimately, taking the effective rate from sub-3% to 24% overnight will throw sand into the gears of global supply chains in ways that we have not seen certainly since the pandemic, and perhaps since the Second World War,” a group of Wells Fargo economists said in a statement.
