US homeowners bear brunt of tariffs: Chinese suppliers

On April 2, the day when the US administration announced its so-called "reciprocal tariffs" affecting more than 180 countries and regions around the world, a merchant surnamed Xiong from Hangzhou, East China's Zhejiang Province, felt perplexed.

"It is hard to tell how the tariffs will impact our business and like many others we have drawn up backup plans," said Xiong, general manager of a construction company which operates a customized summer house construction business.

However, while Xiong was worried about the potential impact of the tariffs on his business, he got an invitation. "On this very day, we actually received an invitation from a client based in Boston to conduct an on-site survey at the latter's ski resort, and if this deal is finalized, it will generate $2 million in revenue for us," Xiong said.

As Xiong flew to meet his client, whose company had booked his flight, he asked, "are you not concerned about the tariffs?"

Passing on costs

Xiong said his client told him that "life has to continue even with the tariff, and having no revenue at the ski resort is unacceptable... the only way is to swallow the tariff first and then eventually pass on the increased costs to visitors to the resort, through ways such as higher administration fees."

Xiong's experience on what US officials call "Liberation Day" is just one example illustrating the resilience of mutually beneficial trade flow and business ties between American and Chinese companies in the area of residential and commercial building and maintenance.

Several Chinese suppliers have also seen the negative impact of the hefty tariffs imposed by the US on the sector; however, the impact will mostly be felt by US consumers, as the tariffs will add up the building cost for American homes and lower Americans' living standards.

Although large portion of US home building materials come from Canada and Mexico, industry players pointed out that tariffs on a wide variety of goods from China will also inevitably increase costs in the US home building and construction sector.

The US administration has imposed 145 percent tariffs on Chinese goods and 10 percent tariffs on imports from most other countries. The tariffs will affect Chinese products essential to the US home building and construction sector. From lawn mowers to DIY toolboxes, US homeowners will face higher prices due to the tariffs, several representatives from Chinese suppliers said.

China is a major supplier of many key materials for the US construction industry, Ye Wen, owner of a home building materials company based in South China's Guangdong Province, told the Global Times.

"From my observation and information gathered from expo clients, 'Made in China' fasteners (nails and screws), LED lighting, and decorative building materials accounted for nearly half the US market share," Ye said.

Despite additional costs resulting from the tariffs, Chinese products remain the top choice for the US purchasing managers due to their stable quality, comprehensive supply chain advantages, and responsiveness, Ye said.

Zhong Shangtian, another owner of a home construction company based in Guangdong, told the Global Times that in addition to bolts and nuts, and hardware accessories, the US is heavily reliant on Chinese-made drywall, timber and wood products such as plywood and magnesium oxide wallboard, a newer type of home building material, for which the US heavily relies on Chinese producers.

It is true that many of these products can be and are produced in the US, or Canada, but low-cost offerings from China remain something that US builders rely on... "just imagine the cost benefits if we are talking about large residential district or commercial projects," Zhong said. "To block Chinese-made goods is to rob this cost-effective option from homebuyers."

Meanwhile, Chinese companies have been actively coping with the US tariffs. Chinese suppliers interviewed by the Global Times said that they have worked on ways to diversify their markets, such as making new entries into the ASEAN and European markets, as the US tariffs eroded some of the market demand. None of them is willing to eat the tariffs as it is far beyond their margin and their products can find a buyer in other markets.

Diminished outlook

These warnings coincided with an estimate from the National Association of Home Builders (NAHB), a US industry association, which pegged the typical cost impact of recent tariffs at $10,900 per home, despite ongoing fluctuations in the US tariff policy since early April.

The duties in place on imported steel, aluminum, and other metals have already driven up prices, including for essential supplies like nails, screws, bolts, and fasteners that builders use by the millions, according to New York-based US business media outlet Inc.com.

"There is virtually no short-term replacement of 'Made in China' goods, due to Chinese manufacturers' production capacity, technological sophistication, and supply chain stability that guarantee project progress," Ye said.

"Looking down the pipeline, I think housing accessibility in the US will be compromised because of the sweeping tariffs, new home prices will rise in particular, some developers will choose to delay the projects, and middle- and low-income American households and first-time homebuyers will bear the brunt of it," Ye said.

The NAHB estimates that $204 billion worth of goods were used in the construction of both new multifamily and single-family housing in 2024, and approximately 7 percent of all goods used in new residential construction are sourced from foreign countries.

Overall, builders estimate that recent tariffs have added an average of $10,900 to the cost of each new home, according to the NAHB, citing data from an April survey conducted with the NAHB/Wells Fargo Housing Market Index. This came on top of a 34 percent rise in the cost of building materials since December 2020, which is far higher than the rate of inflation, the NAHB said.

Anirban Basu, chief economist at US industry body Associated Builders and Contractors, told Inc.com that "these tariffs have already materially diminished the outlook for construction activity in 2025."