Will Trump’s tariffs impact Washington’s economy? Homebuilders, farmers weigh in

President Donald Trump’s long-threatened tariffs on Canada and Mexico took effect Tuesday, rattling global markets and setting the stage for costly retaliation from the United States’ North American allies.

Beginning just after midnight, imports from Canada and Mexico are now subject to a 25% tariff, with Canadian energy products facing an additional 10% duty.

Trump also doubled the 10% tariff on Chinese imports to 20%. In response, Beijing imposed tariffs of up to 15% on a broad range of U.S. farm exports and expanded restrictions on U.S. companies, adding about two dozen to the list.

Canadian Prime Minister Justin Trudeau said his country would impose tariffs on more than $100 billion of American goods over the next 21 days. While the President of Mexico announced tariffs of their own.

The impact is already being felt by local homebuilders.

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What do local homebuilders think about new Trump tariffs?

A new study on the cost of building homes in Washington reveals construction prices that far exceed national averages, with regulatory challenges playing a major role in driving costs higher. For homeowners and prospective buyers in Western Washington, these rising costs pose significant challenges to affordability and availability in an already strained housing market.

The report, released by the Building Industry Association of Washington (BIAW), found that the average cost to build a single-family detached home in the state is $309 per square foot. This results in a median sales price of $690,701 for a newly built, 2,505-square-foot home. Meanwhile, townhomes, traditionally marketed as a more affordable option, are actually more expensive to build, averaging $404 per square foot, with a median sales price of $592,195.

One homebuilder in Kitsap County told “The Gee and Ursula Show” on KIRO Newsradio that they are extremely concerned about already high prices and higher mortgage rates. Coupled with the new tariffs on imported supplies—from lumber to drywall and tools—they are being forced to consider laying off construction crews. Meanwhile, Michelle, who texted the show from Olympia, said she was reconsidering a kitchen remodel because of possible extra costs.

“Everything is going to cost more to build or to fix,” said Christian Hernandez, who manages an industrial supply company. “If you’re repairing something or building something, it’s going to cost more.”

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Farmers could feel the impact of the tariffs as well

Farmers in Washington state are also facing significant concerns as they prepare for spring planting, particularly with China imposing a 15% tariff on American farm products, including beef, chicken, soy, and wheat. In addition to apples, Washington is a major producer of beef, dairy, and wheat.

The tariffs could affect exports, as a rise in prices for U.S. products might lead China to buy less beef and wheat, potentially impacting local farmers. On the import side, local farmers could see significant increases in the cost of fertilizer used to grow their crops like apples and wheat.

Corey Rosenbush, with the Fertilizer Institute, said 90% of the fertilizer used by U.S. farmers is imported, with 80% of that coming from Canada. “We are one of thousands of industries impacted by this,” Rosenbush said. “It’s a globally traded commodity, and what happens in India, Brazil, or Europe has a huge impact here in the United States.”

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A warning from Senator Maria Cantwell

Washington Sen. Maria Cantwell also warned that Trump’s tariffs on goods from Canada and Mexico could significantly raise costs for Washington farmers.

According to Cantwell’s office, Washington-grown and processed agricultural exports totaled $7.5 billion in 2023, with $1.3 billion worth of exports going to Canada, the state’s top export market. Mexico, the state’s fourth-largest agricultural export market, received $687 million in exports.

The Small Business Administration reports that 96% of consumers live outside the U.S., and two-thirds of the world’s purchasing power is in foreign countries.

Cantwell’s office noted that two out of every five jobs in Washington are tied to trade and could be impacted by the tariffs.

The senator’s statement highlighted concerns over retaliatory tariffs from other countries.

“As is true for the entire United States, Canada and Mexico are among the state’s largest trading partners. Given the strong economic integration between Washington and its North American trading partners, the Trump tariffs and the likely retaliatory tariffs could have significant and cascading impacts on local businesses and consumers, particularly in the costs for energy, agricultural products, and manufactured goods,” Cantwell said.

Cantwell’s office also pointed to the steel and aluminum tariffs imposed during Trump’s first term as a potential indicator of what might happen again.