Tariffs and trade: How Arizona fits into the commerce linking Mexico, Canada, others
By Russ Wiles | Arizona Republic
Tariffs and trade have dominated headlines in recent days, with President Trump slapping import taxes on Mexico, Canada and China — three of Arizona’s top international partners — only to delay them on Mexico and Canada.
If the higher duties are made permanent, almost everyone could be affected in some way, from higher prices on produce at the supermarket to potential layoffs for family members or friends. Here are some key issues that involve Arizona:
- Arizona exported $28.9 billion to foreign nations and imported $35.4 billion as of 2023, according to the International Trade Administration of the U.S. Department of Commerce. Mexico ranked as the top export market for Arizona goods with purchases worth $8 billion, followed, in order, by Canada, the Netherlands, China and the United Kingdom. Mexico also ranked as the top source of imports coming here, supplying $11.8 billion of goods, followed by China, Canada, Taiwan and Japan.
- If consumers must pay more for imported goods, they will have less money to spend or invest in other ways, noted Dennis Hoffman, an economist in the W.P. Carey School of Business at Arizona State University. That would hurt the many businesses that depend on consumer spending, while companies that import products will face higher outlays if they can’t fully pass along these costs.
How Tariffs May Affect the Home Building Industry
By Vincent Salandro | Builder
The (National Association of Home Builders) is urging the Trump Administration to exempt building materials from the proposed tariffs “to avoid exacerbating the housing affordability crisis.” In particular, the association said more than 70% of the imports of softwood lumber and gypsum—both essential to home building—come from Canada and Mexico, respectively.
“Tariffs on lumber and other building materials increase the cost of construction and discourage new development, and consumers end up paying for the tariffs in the form of higher home prices.” – Carl Harris, chairman of the NAHB
Todd Tomalak, principal, advisory of building products for Zonda, shared several high-level takeaways from the tariff announcement and potential impacts.
The industry faces three critical issues heading into the first half of 2025:
- A new tariff, which effectively changes upstream cost structure for a number of housing categories.
- Rising mortgage rates, which effectively increase the cost of payments to homeowners.
- A more price sensitive consumer, who since mid 2024 no longer has excess savings to offset payment shock.
With three implications:
- Costs for materials to grow 6 to 14% in 2025, based on value chain exposure to tariff and domestic manufacturer response.
- Deferred home sales and remodels, based on path of mortgage rate and buyer sensitivity to costs.
- Mixed impact to brands and products. In our view, an approximate eight to 18 month “brand readjustment” will occur as suppliers balance margin challenges versus shifting market share.
Some stories appear as partial reprints because of publisher restrictions.
Related: How the lumber industry misread Covid and ended up with a global shortage and sky-high prices | NBC News
“In April (2021), as lumber prices hovered around $1,200, the National Association of Homebuilders estimated that the rise in lumber prices had added over $36,000 to the cost of a new single-family home.”