Canada tariffs could add $14,000 to the cost of building a home by 2027, report warns – CNN

Report on the Impact of US Tariffs on Housing Affordability and Sustainable Development Goals

Executive Summary

Recent trade policies enacted by the United States, specifically tariffs on Canadian imports, pose a significant threat to housing affordability and progress toward key United Nations Sustainable Development Goals (SDGs). A report by the Canadian Chamber of Commerce indicates that these tariffs on essential construction materials could substantially increase the cost of new homes, directly undermining SDG 11 (Sustainable Cities and Communities). This analysis examines the economic repercussions of the tariffs, their conflict with global partnership principles (SDG 17), and their broader impact on economic stability (SDG 8).

Projected Economic Impact on Housing Construction

The tariffs are projected to escalate construction costs, making homeownership less accessible for many Americans. This directly challenges the objective of ensuring affordable housing for all.

• Cost Increase: The Canadian Chamber of Commerce estimates that tariffs on Canadian imports could add an extra $14,000 to the cost of an average new US home by 2027.
• Cumulative Effect: When combined with tariffs imposed during the previous presidential term, the total additional cost could reach $20,000 per home.
• Industry Impact: A National Association of Home Builders (NAHB) survey from April revealed that 60% of home builders were already experiencing price increases due to the tariffs, creating uncertainty in project pricing.

Challenges to SDG 11: Sustainable Cities and Communities

The primary concern raised by the tariff policy is its direct opposition to SDG Target 11.1, which aims to ensure access for all to adequate, safe, and affordable housing. By increasing the cost of essential building materials, the tariffs exacerbate the existing housing affordability crisis in the United States.

Dependence on Imported Materials

The US construction industry relies heavily on imports, particularly from Canada, for materials vital to building sustainable and affordable housing infrastructure.

1. Lumber: In 2023, Canada supplied 69% of all US lumber imports. Lumber constituted the majority of housing construction imports, valued at $8.5 billion.
2. Metals: Canada accounted for 25% of imported iron and steel and 18% of copper imports in the same year.
3. Geographic Impact: States with high construction volumes, such as Texas, Florida, and California, are expected to experience the most acute price shocks, further straining their housing markets.

Contradictions with SDG 8 and SDG 17

While intended to support domestic industry in line with principles of SDG 8 (Decent Work and Economic Growth), the tariffs create market instability and strain international partnerships, which are crucial for achieving SDG 17 (Partnerships for the Goals).

Trade Policy and Partnership Tensions

• Tariff Measures: The administration has imposed or threatened significant tariffs, including a 50% tax on imported steel and aluminum, a potential 50% tariff on copper, and a 35% tariff on Canadian goods non-compliant with the US-Mexico-Canada Agreement (USMCA).
• Erosion of Partnership: These unilateral actions create trade tensions that undermine the collaborative spirit of international agreements like the USMCA and the broader goals of SDG 17, which call for a universal, rules-based, and equitable multilateral trading system.
• Economic Uncertainty: The policy’s stated goal of protecting the domestic economy is countered by the difficulties it creates for the construction sector, a key driver of economic growth. The White House maintains that foreign exporters, not American consumers, will bear the cost, citing a fall in the prices of imported goods. However, industry reports indicate that price volatility is a significant challenge for builders.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article discusses issues related to several Sustainable Development Goals (SDGs) through its focus on housing affordability, international trade policies, and their economic consequences.

• SDG 11: Sustainable Cities and Communities

  This is the most prominent SDG in the article. The core issue is the impact of tariffs on the cost of building materials, which directly threatens the affordability of housing. The article explicitly states that tariffs could have an “unintended side effect: making homeownership even less affordable for many Americans” and that “America needs millions more affordable homes.”

• SDG 17: Partnerships for the Goals

  The article is centered on international trade relations, specifically between the United States and Canada. It details the imposition of tariffs, trade tensions, and references a multilateral trade agreement (USMCA). This directly relates to the goal of fostering a global partnership for sustainable development, which includes promoting a fair and open trading system.

• SDG 8: Decent Work and Economic Growth

  The article touches upon economic policies (tariffs) intended to “support American industry.” It discusses the impact of these policies on a major economic sector—the construction industry—and the broader economy through housing costs. The disruption and uncertainty in pricing for home builders also relate to stable economic conditions.

• SDG 1: No Poverty

  While not mentioned directly, housing affordability is a critical component of poverty and economic vulnerability. A significant increase in the cost of housing, as described in the article, can push families towards poverty or prevent them from escaping it. Access to affordable housing is fundamental to achieving SDG 1.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the issues discussed, the following specific targets can be identified:

1. Target 11.1: By 2030, ensure access for all to adequate, safe and affordable housing and basic services.

   The article directly addresses this target by highlighting a major threat to affordable housing. The report cited estimates that tariffs could raise the “average cost of building a US home” and “worsen housing affordability,” making it harder to ensure access for all.

2. Target 17.10: Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system.

   The article’s focus on the imposition of tariffs, such as the “35% tariff on Canadian goods” and a “50% tax on all imported steel and aluminum,” represents a move away from open and non-discriminatory trade. The discussion of “US-Canada trade tensions” and the US-Mexico-Canada Agreement (USMCA) directly relates to the functioning of the multilateral trading system.

3. Target 1.4: By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property.

   The article’s central theme of “making homeownership even less affordable” directly impacts this target. Rising costs create a barrier for individuals, especially the poor and vulnerable, to access and own property, which is a key economic resource and basic service.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article provides several specific quantitative and qualitative indicators that can be used to measure the impact on the identified targets.

• Indicators for Target 11.1 (Affordable Housing):

  • Cost of Housing Construction: The article provides a direct financial indicator: “the average cost of building a US home could rise by an additional $14,000 by the end of 2027,” with a total potential added cost of “$20,000 per home.” This directly measures the decline in housing affordability.
  • Impact on Industry: A survey finding that “60% of home builders were already seeing tariff-related price increases” serves as an indicator of widespread cost pressures in the housing market.

• Indicators for Target 17.10 (Trade System):

  • Tariff Rates: The article specifies the exact tariff rates being imposed, which are direct measures of trade barriers. These include a “35% tariff on Canadian goods,” a “50% tax on all imported steel and aluminum,” and a threatened “50% tariff on all copper imports.” These figures can be used as indicators of deviation from an open trading system.
  • Volume and Value of Imports: The article mentions that “Nearly $13 billion — or roughly 7% — of the estimated $184 billion of goods that went into new single-family and multifamily construction in 2023 were imported.” It also specifies the percentage of key materials imported from Canada, such as “69% of US lumber imports.” Tracking these figures would indicate the impact of tariffs on trade flows.

4. Table of SDGs, Targets, and Indicators

Source: cnn.com