Canada and Mexico tariffs risk inflating US housing crisis, Trump is warned

Pressing ahead with steep tariffs on Canada and Mexico risks exacerbating the US housing crisis and threatening the broader economy, dozens of congressional Democrats have warned Donald Trump.

The US president, after threatening to hit imports from the US’s two biggest trading partners with a 25% tax, is weighing how to proceed after approving a one-month delay.

In a letter to Trump seen by the Guardian, Democrats noted that the US imports key construction materials worth billions of dollars – from lumber to cement products – from Canada and Mexico each year.

“Given the severe housing shortage, compounded by rising construction costs, persistent supply chain disruptions, and an estimated shortfall of six million homes, these looming tariffs, while intended to protect domestic industries, risk further exacerbating the housing supply and affordability crisis while stifling the development of new housing,” they wrote.

In a statement, the White House claimed Trump would use tariffs to “usher in a new era of growth and prosperity” for the US.

Trump has repeatedly vowed to impose tariffs on Canada and Mexico, a move he has said will spur his country’s neighbors to work harder to reduce the number of immigrants crossing into the US, and stem the flow of fentanyl.

The proposed duties are sweeping, however – hitting all imports from both countries – raising concerns that they could raise prices throughout the US economy. Trump pulled back from the brink earlier this month following 11th-hour talks with Claudia Sheinbaum of Mexico and Justin Trudeau of Canada.

US officials are in talks with both countries ahead of the new deadline, 4 March, when tariffs are now due to be enforced.

More than 40 Democrats in the House of Representatives, led by Jim Costa of California, urged the White House to consider housebuilding industry estimates that the proposed tariffs on Canada and Mexico, paired with duties already charged on Chinese goods, will raise the cost of imported construction materials by up to $4bn.

Such increases are often “passed on to consumers, directly contributing to higher home prices and a slowdown in new construction activity, further burdening American families”, they wrote.

“Immediate action will not only shield American families from escalating housing costs but also demonstrate leadership in steering our nation toward sustainable economic growth,” the representatives wrote to Trump. “We stand ready to work with you and other stakeholders to develop a balanced trade policy that bolsters domestic manufacturing while ensuring that safe, affordable housing remains accessible to all citizens.”

The representatives – all Democrats – stressed that they were looking forward to “collaborating” with the White House “on solutions that promote robust economic growth, protect American families, and secure a vibrant housing market for the future”.

Kush Desai, a White House spokesperson, said: “In his first administration, President Trump instituted an America First economic agenda of tariffs, tax cuts, deregulation, and an unleashing of American energy that resulted in historic job, wage, and investment growth with no inflation. In his second administration, President Trump will again use tariffs to level the playing field and usher in a new era of growth and prosperity for American industry and workers.”