Canadian officials say a new tariff imposed by the Trump administration will raise the cost of new homes in the United States by $1,000 each, and shut 150,000 Americans out of home ownership. Washington's decision also puts "thousands" of U.S. homebuilding jobs at risk, according to Canada's ministers of natural resources and foreign affairs.
The comments follow preliminary action by the U.S. Commerce Department to impose a 20 percent tariff on $5.77 billion worth of soft wood imports from Canada to the United States. The wood is a key ingredient of family homes.
U.S. officials allege that Canada unfairly subsidizes exported wood. Subsidies could make the product cheaper, making it difficult for U.S. companies to compete on price.
Canada "strongly disagrees" with the decision to impose this "unfair and punitive" tax, says Canada's resources minister, Jim Carr. Canada's foreign minister, Chrystia Freeland, says Canada will take the issue to court, where the United States has lost similar cases in the past.
U.S. Commerce Secretary Wilbur Ross says this has been "a bad week" in U.S.-Canadian trade relations, noting an additional dispute over Canadian milk exports.
While the dispute over wood tariffs might raise the cost of new homes in the United States, a report published Tuesday by the Census Bureau shows sales of newly-constructed homes jumped upward by 5.8 percent last month. If sales continue at that pace for a year, 621,000 homes would change hands. Prices also rose.
A separate report from a business group called the Conference Board showed consumer confidence declined in April. Economists at Wells Fargo say that despite the drop, consumer confidence remains near a 12-year high. Experts watch consumer confidence for clues about consumer spending, which drives 70 percent of U.S. economic activity.
