Many housing experts believe President Donald Trump's plans to impose a 5% tariff on imported Mexican goods could have a negative impact on the housing market, specifically through higher home prices and renovation costs, Realty News Biz reports. Newly built homes using steel and home renovations involving steel and cement products are likely to cost more should the tariffs be imposed.
Around 11% of U.S. steel imports come by way of Mexico, according to data from the International Trade Administration. Steel is an important building material that’s used in both residential and commercial construction, and is also vital for home renovations. Another material that will be affected is cement, with Mexico being the fifth largest supplier to the U.S.
Trump imposed the tariffs on Mexico in order to persuade it to do more to prevent illegal immigrants from entering the country through its borders. If Mexico fails to take action, the tariffs will increase by 5% each month until October. At that stage, the total tariff would be 25% on Mexican goods.
The tariffs are significant because the U.S. imported $346 billion worth of Mexican goods in 2018 alone, University of Michigan economists told CNBC.
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