President Donald Trump imposed a new wave of 50% tariffs on Canada over the weekend, including on key construction inputs like cement, plywood, and certain machinery and tools.  

The Trump administration put the tariffs in place Saturday after trade negotiations with Canada lasting almost a month didn’t result in an agreement. The newly instituted tariffs, proposed July 20, join prior charges of up to 50% on Canadian aluminum and steel that Trump put in place in 2025, as well as lumber tariffs the president increased last year. 

Aggressive trade policy has been a hallmark of Trump’s second term, with the president leaning on a host of obscure trade statutes to enact sweeping tariffs in various forms after the Supreme Court ruled his preferred method to implement them unconstitutional in February. The administration’s overarching approach to trade has made it more expensive for developers to build. 

Overall construction materials prices are 7.4% higher than a year ago, according to Associated Builders and Contractors. Notably, copper wire and cable prices are up 17.9% year-over-year, iron and steel are up 17.6%, and softwood lumber is up 15%.

“The spiraling trade war between the United States and Canada should be viewed as largely negative for contractors on both sides of the border,” ABC Chief Economist Anirban Basu told Bisnow in a statement. “In particular, additional tariffs on key construction materials like steel will further expand the cost of delivering construction services, dampening construction starts in the process.”

Construction activity is up year-over-year, but that is heavily propped up by data centers. ABC contractors not working on a data center averaged 7.5 months of backlog, compared to an 11.4-month backlog for data center contractors. 

Matt Long, a partner at Phoenix-based multifamily developer and contractor Porter Kyle, told apartmentbuildings.com that the latest round of tariffs directly hits input categories that hadn’t been targeted yet, like cement, wood and paper products, and machinery and tools.

Long said cement is bought regionally but repriced nationally, so if Canadian cement imports are more expensive, domestic producers get more pricing power across the country.

Canada and Mexico account for 27% of U.S. cement imports and nearly 7% of U.S. cement consumption, according to a 2025 statement from the American Cement Association.

“The deeper cost is uncertainty,” Long told the outlet. “Production homebuilding, especially build-to-rent, is underwritten 18 to 36 months out. Adding 50% to an input class with 30 days’ notice introduces uncertainty, which is included in every bid as contingency.”

The Trump administration implemented the latest round of tariffs under Section 338 of the Smoot-Hawley Tariff Act of 1930, a nearly century-old provision that allows charges on imports from nations whenever the president finds “as a fact” that those countries impose unreasonable charges or limitations or engage in discriminatory behavior against U.S. commerce. 

No presidential administration had ever used the provision before to enact tariffs, which under this provision have rates capped at 50%. 

“This would be unprecedented to use them in the current environment to impose tariffs, and there are additional legal questions about whether Section 338 has been superseded by laws that have been passed in the meantime,” Bryan Riley, director of National Taxpayers Union Foundation’s free trade initiative, told Bisnow earlier this year. 

Long said builders are now navigating varying tariff rules that make identifying the country of origin for their supplies key in estimating costs correctly. He also said that retaliation from Canada could further deepen cross-border disruption. 

Canadian Prime Minister Mark Carney said the country will impose dollar-for-dollar retaliatory tariffs on the U.S., set to go into effect in early September. 

Long told Bisnow his company will be closely watching cement, glass, plywood and panel products, and HVAC equipment.

“Those are the categories we're watching most closely for cost impacts on upcoming projects, but after just a few days, it's simply too early to track,” Long said.