ROCHESTER, N.Y. — In July, President Donald Trump imposed 50% tariffs on certain goods to Canada in response to what he called Canada’s “discriminatory treatment of American products”. As a result of that, Americas’ northern neighbors announced dollar-for-dollar retaliatory tariffs. It’s leaving some industries on edge for what may come.
“Another issue we’re facing is tariffs,” Nick Graziose, the director of development at Gerber Homes, said. “During COVID-19, especially, prices of lumber skyrocketed. And they came down a little bit, but they never went back to where they originally were. And now we’re facing additional tariffs here today.”
Between single family houses, multi-family projects and apartments, the family business builds nearly 100 homes every year. Each project takes anywhere from six to 12 months to build. While they typically work alongside clients throughout their custom building process, Graziose says the units that are made independently are sold within days.
“Housing has never been this crazy before,” he said. “We’ve never seen such demand for housing, and we’ve never seen such a shortage of supply. And that’s just been driving the prices up, along with a lot of other factors outside of supply and demand.”
The construction industry has been facing labor shortages, complex energy mandates, and now faces the possible return of tariffs. The United States International Trade Commission reports Canada as the dominant supplier of U.S. lumber imports. Graziose says the cost of lumber for a single home increased by about $50,000 during the pandemic because of that trade war. Prices started to settle, but now with potential tariffs around the corner, Gerber Homes is bracing for impact.
“It’s been rather steady over the last couple of years, ever since COVID, kind of ended and the trade war kind of settled down. But we are facing another trade war here with Canada,” he explained. “We are seeing it and a lot of our hardwoods and, you know, cabinets and vanities and kitchen packages, those will definitely be increasing along with appliances and finished goods.”
While these home details may see minor to the eye, Graziose says the cost of items like cabinets and vanities has already increased by thousands of dollars in price. Those costs need to be absorbed by someone, and Gerber Homes is making efforts to avoid passing the added costs onto future homebuyers. Graziose says they often look to sign longer contracts with workers and suppliers to lock in a price for a longer period of time, so if factors like possible tariffs take effect, these costs won’t increase for the developer or the homebuyer.
However, Graziose says there are many industries proactively raising the cost of materials just in case tariffs do take a toll on business.
“There is more risk associated with the trade war,” Graziose said. “People have to bake-in prices of uncertainty and risk on their end. So if they say they’re going to hold their price, it’s only good 30 days, no longer like six-month terms like they used to be.”
Tariffs are still waiting to be officially put into effect. Canada’s dollar-for-dollar tariffs are set to begin on Tuesday, Sept. 8.
“We’re taking [it] week by week [and] seeing what’s going to actually be impacted,” Graziose added.