Trump’s Trade Conflict with Canada Strains Relations With GOP Allies

President Donald Trump’s trade conflict with Canada has put him at odds with one of the Republican Party’s key financial supporters, the home builders’ association. On July 20, the White House introduced three proclamations imposing 50% tariffs on specific Canadian imports under Section 338 of the Tariff Act of 1930. This marks the first time a U.S. president has invoked this authority. The tariffs target products like wine, hockey sticks, and cement, and apply regardless of agreements under the United States-Mexico-Canada Agreement.

These measures affect about $20 billion in yearly imports and will come into force on August 19. Shortly after, the National Association of Home Builders (NAHB) warned members that this would exacerbate the uncertainty in supply chains and pricing of building materials, highlighting concerns over items such as cement, plywood, and furniture. The association urges the administration to exempt these materials from the tariffs to avoid worsening the housing crisis.

“Recent tariff developments could create more uncertainty for home builders over building material supply chains and pricing,” the NAHB stated in a blog post.

GOP’s Reliable Donor at Odds

The NAHB isn’t a minor critic. During the 2024 election cycle, its political action committee, BUILD-PAC, allocated $1,664,412 to Republican candidates, equating to 80.8% of total contributions, while donating $393,099 to Democrats, according to OpenSecrets. Overall, the group contributed $3,320,075 and spent $3,450,000 on lobbying.

For over a year, the association has lobbied Trump to exclude construction materials from tariffs. In February, they collaborated with Senators Jacky Rosen and Chris Coons on the Housing Tariff Exclusion Act to automatically exempt home building materials from tariffs. According to NAHB chairman Bill Owens, tariffs have already increased costs for 60% of builders, with an average impact of $10,900 per home.

Canada is vital to the supply chain, accounting for 85% of U.S. softwood lumber imports and nearly 25% of the domestic supply. The new proclamations do not alter existing duties on softwood lumber, steel, aluminum, and copper. However, the Commerce Department is set to reduce combined duties on Canadian softwood from 35% to 25% in mid-August. This issue arises as builder sentiment is near post-recession lows, with the NAHB’s index with Wells Fargo dropping to 34 in July, remaining under 40 for 15 continuous months.

“Many potential buyers remain on the sidelines as they wait for lower mortgage rates,” Owens explained.

Growing Republican Concerns

Several Republican legislators have voiced concerns over the tariffs. Senate Majority Leader John Thune has expressed his disapproval of tariffs lacking specific purposes. Senator Mike Rounds has highlighted the affordability issue, noting that inflation is rising. According to Politico, some within the White House worry that tariff discussions harm Republican messaging on costs leading to midterm elections.

“Any conversation about tariffs, unless it’s reducing them, is a bad conversation for Republicans,” an anonymous source stated.

The administration argues the tariffs counter Canadian discrimination against American goods such as cars, alcohol, and dairy to create fairer conditions for U.S. exporters. Canadian Prime Minister Mark Carney criticized the measures, citing a direct violation of the North American trade pact. He announced plans to intensify negotiations with Trump in the coming weeks.

The 30-day grace period before implementing the tariffs offers an opportunity for a resolution and time for the builders’ lobby to persuade the administration.

Economic Sentiment Amid Tariffs

A Washington Post/ABC News/Ipsos poll revealed that 65% of adults disapproved of Trump’s economic management, with 66% labeling groceries as “unaffordable.” Meanwhile, a Pew survey indicated that 28% of Republican voters believe his policies have worsened the situation, up from 18% in January.

Republican strategist Alex Patton suggested the recent events increase challenges for GOP candidates, noting that tariffs present a nuanced issue. Even though Republican voters favor them more than the general population, the backing within the party is not unified. A Pew survey showed GOP support for tariffs at 71%, which drops to 43% among non-MAGA Republicans. As per ABC News/Washington Post/Ipsos polling, 47% within the party foresee tariffs worsening inflation.

“Affordability is affordability, and voters get frequent reminders of how affordable things are or are not, gas, food, electricity bill, etc.,” Patton commented.

Contact Newsweek editors on this story: Jenni Fink and Sam Wilson.