NEW ORLEANS (WVUE) - Homebuilders in the New Orleans area, as well as the Port of New Orleans, are pensive over the escalating trade war between the U.S. and China.
Builders worry that the fight between the U.S. and China on trade will stifle home building.
"It’s going to slow us down because the prices are going to go up. We were just now getting some relief from the lumber, lumber had gone up 65%, it’s now down around 35%,” said Randy Noel, a local builder who serves as Chairman of the National Association of Home Builders.
President Donald Trumped announced new U.S. tariffs on more than $200 billion worth of Chinese imports. And within hours, China said it would retaliate with higher tariffs on $60 billion worth of U.S. goods.
"Our economists at the National Association of Homebuilders says that it will add a billion dollars worth of costs to all the houses in America that we build,” said Noel.
China vows to press ahead with increases of 10% and 5% on 5,207 types of U.S. goods.
"There’s a lot of things we use in houses, faucets, light fixtures, cabinets, granite counter tops, all come from China, so all of those are going to get an impact with the new tariffs,” Noel said.
"The timing is terrible in the sense that we have these natural disasters, that immediately, just economics shoots prices up, supply and demand,” said John Luther, CEO of the Home Builders Association of Greater New Orleans.
An increase in home prices has palpable results in Louisiana.
"Every time you raise the price of a house in Louisiana, for example, for every thousand dollars you add to the cost of the house, that bumps 5,000 people from being able to buy a house, so it is concerning,” Noel further stated.
The Port of New Orleans issued the following statement to FOX 8 News:
“We are monitoring the situation closely as China is one of Port NOLA’s top trading partners. We voiced concern about China’s retaliation against U.S. exports following the initial tariffs on steel and aluminum that went into effect this summer. Any additional retaliation would have further negative impact on the Port, our surrounding communities and the U.S. economy. The Port of New Orleans believes free and fair trade policies are the best means to promote all sectors of the U.S. economy, and we will continue communicating to members of the Louisiana delegation that it is in the best interest for all sectors of the economy that the Administration limit actions related to this matter.”
Noel said he has taken the industry’s concerns over tariffs directly to the White House.
"I talked to Secretary Ross at Commerce, Secretary Minuchin at Treasury…Vice President Pence, beginning the first part of the year we told them all that these tariffs were going to have a negative effect on housing, very much a negative effect on the affordability of housing, that please find another way to go, negotiate, etc,” said Noel.
Luther said the home building industry is already dealing with labor issues.
“We have just amazingly challenging labor shortages out there, all over, and we’re working to train up that next generation of trades' contractors and that’s going to take a while, so we’re already suffering that issue that is going to increase pricing,” said Luther.
And the Home Builders Association of GNO said it certainly does not help that the new tariffs are happening at a time when interest rates are going up.
"So it’s going to cost more to borrow for a mortgage, so that is going on, so it absolutely has people sitting out the market, or they re-calibrate what it is they thought they wanted to buy, in terms of pricing of the house,” said Luther.