Vulnerability to Potential Tariffs on Canada, China, and Mexico

February 26, 2025 / 3 min read

Overview

The U.S. construction industry faces varying degrees of vulnerability to potential new tariffs due to its reliance on imported materials from Canada, China, and Mexico. The impact of any new trade policies would differ substantially across material categories, with some sectors facing major cost implications while others remain relatively insulated. The data in this report is gathered from USA Trade Online published by the United States Census Bureau as well as various publications and estimates.

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High Import Dependency Materials

Marble and Granite

The marble and granite sector demonstrates import dependency, with 90% of the market relying on foreign sources. Canada's dominant position, providing 34.7% of imports, makes this sector particularly sensitive to North American trade policies. The limited domestic alternatives suggest that tariffs would directly translate to higher costs for finishing materials like countertops.

Floor Coverings

The floor coverings market, encompassing carpet, vinyl, and wood products, shows substantial import reliance at 53%. China's contribution of 21.07% makes this sector especially vulnerable to any China-specific tariffs. Given the essential nature of flooring in construction projects, tariff-induced price increases could impact overall construction costs.

Moderate Import Dependency Materials

Crude Oil and Petroleum Products

In the asphalt shingle manufacturing sector, imports constitute 25% of the market. Canada's 56% share of imports and Mexico's 12% contribution highlight the importance of USMCA (U.S., Mexico, Canada Agreement) considerations in any tariff discussions.

Concrete and Cement

The concrete sector shows relatively modest import dependency at 24%. Canada of the three countries leads cement imports with 40.3%, followed by Mexico at 15.9%. The sector's natural regionalization and high transportation costs have fostered strong domestic production capabilities, providing better insulation against tariff impacts.

Iron and Steel

With 21% market import dependency, the iron and steel sector maintain s substantial domestic production. Canada leads imports at 26.1%, followed by Mexico at 11.3%, while China's presence remains minimal at 1.8%.

Balanced Import Sources

Doors, Windows, and Frames

This category demonstrates balanced international competition with Canada (33.9%) and China (28.8%) sharing similar import shares. The U.S. is one of the top importers of this category, importing 642 million dollars in 2023.

Gypsum and Plasters

Used extensively in drywall, fiberboard, and concrete, gypsum imports show balanced sourcing between Mexico (28.4%) and Canada (27.7%), while China is much lower at 0.3%, with moderate overall import dependency at 36%.

Canadian-Dominated Categories

Wood Products

Several wood-based materials show overwhelming Canadian market dominance:

Wood shingles and shakes: 99% Canadian import share
Particle board: 93.5% Canadian import share with imports making up 23% of U.S. supply
Plywood and laminated wood: 16.9% Canadian import share, while China has a 6.5% share with imports making up 22% of U.S. supply

Potential Impact Analysis

Short-term Effects

Price volatility, particularly in high-import-dependency categories
Supply chain disruptions requiring rapid supplier diversification or cost absorption

Long-term Effects

Expansion of domestic production, especially in moderately import-dependent categories
Manufacturing relocations affecting regional supply patterns
Increased overall construction costs affecting housing affordability and commercial development

The ultimate impact of new tariffs would depend heavily on specific materials targeted and rates imposed. The varying degrees of import dependency across different materials suggest that broad-based tariffs could affect U.S. construction costs, with some sectors facing more dramatic impacts than others.

U.S. Census Bureau. "USA Trade Online." U.S. Department of Commerce. https://usatrade.census.gov/index.php
Granite Guy Inc. "All About Marble and Granite Quarries in America." https://graniteguyinc.com/all-about-marble-and-granite-quarries-in-america/
U.S. Geological Survey. (2024). "Mineral Commodity Summaries 2024: Gypsum." https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-gypsum.pdf
Council on Foreign Relations. "How the U.S. Oil and Gas Industry Works." https://www.cfr.org/backgrounder/how-us-oil-and-gas-industry-works
Concrete Financial Insights. "US Cement Industry Data." https://concretefinancialinsights.com/us-cement-industry-data
United Nations Economic Commission for Europe. (2020). "USA Timber Market Statement 2020." https://unece.org/fileadmin/DAM/timber/country-info/statements/usa2020.pdf
American Iron and Steel Institute. (2024, January). "Steel Imports Down 8.7% in 2023." https://www.steel.org/2024/01/steel-imports-down-8-7-in-2023/
Floor Covering Weekly. "U.S. Floor Covering Imports Report." https://www.floorcoveringweekly.com/main/features/us-floor-covering-imports-report-39583