The delay comes after Trump allowed a 25% duty on Mexico and Canada to take effect on Tuesday. On Wednesday, he granted a one-month pause on automobile tariffs for those countries.
Thursday’s news is good for homebuilders as lumber, steel, aluminum, gypsum and other building inputs fall under the UNMCA. But builders rely on Mexico for these materials at varying levels.
According to the National Association of Home Builders (NAHB), more than 70% of gypsum and lime is sourced from Mexico. Data from John Burns Research & Consulting (JBREC) shows that builders rely on Mexico for appliances, hardware and glass.
The U.S. does not import lumber from Mexico, as 30% of lumber imports come from Canada, which has not yet received a tariff delay on USMCA-covered goods.
The NAHB has made no secret of its opposition to Trump’s tariffs, as many vital building materials are sourced from Mexico, Canada and China. The trade group has asked for an exemption on these materials but has yet to receive one.
Tariffs on these countries would work against Trump’s day-one executive order that called for emergency home price relief, as some percentage of the cost of the tariffs would trickle down to buyers of newly built homes.
The daily changes in tariff policy have generated hefty swings in the stock market, and they’re damaging homebuilders’ outlook on the housing market. Citing tariffs, the NAHB/Wells Fargo Housing Market Index (HMI) for February fell five points relative to January.
While the pause gives temporary relief, it does not give homebuilders or the broader economy the certainty needed to effectively organize and operate their businesses.
After letting 25% tariffs on Mexico and Canada take effect at the beginning of February, he granted a one-month delay in exchange for concessions related to immigration and fentanyl trafficking.
Trump also plans to implement so-called “reciprocal” tariffs, which would have the U.S. match tariff levels on every good from every country that places a tariff on the U.S. Economists said this policy would result in chaos, as the price structure of the vast majority of the economy would be affected.
Trump said that reciprocal tariffs will take effect on April 2. Coupled with the newly announced pause in Mexican tariffs, April 2 is another high-stakes tariff deadline. A 25% duty on steel and aluminum imports is scheduled for March 12.
Sheinbaum had planned to announce Mexico’s response to Trump’s tariffs on Sunday. It does not appear that Mexico agreed to any other concessions in exchange for the delay.
