How Trump tariffs could impact cost of groceries, new homes in North Texas
President Donald Trump's escalating trade war could impact the housing market in Texas, according to economists and industry experts.
He announced plans Tuesday to double tariffs on steel and aluminum imports from Canada in retaliation for Ontario putting a surcharge on electricity coming into the U.S. Trump later backed off that plan, Commerce Secretary Howard Lutnick told CBS News, after Lutnick and Ontario Premier Doug Ford announced Canada would suspend its new 25% surcharge on electricity exports.
Lutnick, asked by CBS News in an interview Tuesday if the president plans to go through with the 50% tariffs, replied, "No, that's off, too. So, we're at 25% for steel and aluminum because that's where we were."
The tariffs are expected to raise prices on new homes.
Steel and aluminum are essential construction materials for building new homes, and Canada is the top source of steel and aluminum sent to the U.S. An increased tariff means American companies will not pay more to bring those products in and will likely pass the added costs on to homebuyers.
Mr. Trump has put a pause on a lumber tariff for Mexico and Canada until April 2, which came as a relief to builders.
According to the National Association of Home Builders, those tariffs, when combined with existing tariffs, will raise the cost of imported construction materials by more than $3 billion.
Data company CoreLogic predicts that will add between $17,000 to $22,000 to the price of a new home.
Industry experts say the added costs could even slow down or halt the construction of new homes at a time when demand is high in Texas.
"Being able to build enough houses – we're 300,000 houses short in Texas right now - that would have a big negative impact on our on our homebuilding industry as well, which also ultimately makes its way into consumers," said Ray Perryman, the founder and CEO of The Perryman Group, an economic research company based in Waco.
According to The Perryman Group, Texas will lose 370,000 jobs a year and around $46 billion in gross domestic product if 25% tariffs are fully implemented and sustained on Mexico and Canada.
Perryman expects prices to increase on everything from avocados to cars.
"The first thing you're going to notice is produce because it's not something you can store up," he said. "It's perishable. And we buy a lot of produce from Mexico."
The Perryman Group analysis found that the president's proposed tariffs would add about $1,500 a year in costs for the average family.
"And that's a combination of the supply chains that would get broken down and become less efficient, and the inflation that would be caused by the tariffs," said Perryman.
Inflation is still the biggest concern for North Texas families. A new study from Northwestern Mutual found 83% of adults surveyed in Dallas said they've noticed their grocery costs go up in the past three months.
"This is a great example of why it's important to, first of all, have a financial plan," said Jake Meredith, Northwestern Mutual wealth management advisor.
Meredith said there's still a lot of uncertainty over how this trade war will play out, but it's not too early to prepare for rising costs.
"I would start planning for increases now, if you're a business owner or if you're just feeding your own family," Meredith said.
Meredith said stock market decisions will depend on your stage of life, whether you're decades away from retirement or already in it. Wall Street has taken a dip in response to tariff news.
"Our philosophy is always the markets will come back, the markets will rebound," he said.
Both investors and families are watching closely to see what happens next with tariffs.
