The implementation of tariffs on lumber, oil, and other products related to construction could have a direct impact on housing and home insurance costs in Massachusetts and the Vineyard where residents have already been hit with inflated insurance costs.
President Donald J. Trump had announced a one-month pause on possible tariffs on imported Canadian goods earlier this month, before backtracking a few days ago. His most recent threat was that 25 percent tariffs on lumber could be introduced as soon as Friday, March 14th.
According to a CNBC report, these tariffs on Canadian lumber could increase building costs from $7,500 to $10,000 for each home. As building costs rise, so could all related businesses, like insurance.
Massachusetts Property Insurance Underwriting Association (MPIUA) — also known as the Fair Access to Insurance Requirements (FAIR) Plan — General Counselor Frank O’Brien said he’s looking out for tariffs as a possible change to the insurance market on the Island and throughout Massachusetts.
“If you’ve got something that’s subject to a 25 percent price increase — like lumber from Canada — that’s gonna put pressure on prices,” O’Brien said.
About 36.6 percent of Island homeowners are insured through the Massachusetts FAIR plan.
Local agents say there could be an increase in costs as well.
Joe Gervais, owner of Tashmoo Insurance in Vineyard Haven, said tariffs could have an effect on premiums, though likely not for another three years. Although companies re-evaluate their risk models annually — or even more frequently — he said changes don’t necessarily happen that quickly. Where homeowners could be hit sooner with higher prices would be in the building stages of the home buying process, or renovations on an existing home. All of that is dependent on whether the domestic lumber market can adjust, Gervais said.
“The average home rebuild cost on Martha’s Vineyard is one million — half of it is material — and I think the lumber portion of that is 40 to 50 percent,” Gervais said. “If we had a 25 percent tariff on Canadian lumber, that would jack the price up.”
Tariffs are not the only problem with Trump’s policies.
Over the past year many commenters on
this forum said that Trump would not deport
people who are in the US legally.
We have now scores of people who have
been deported or detained, even though
they are working through a legal process
in our immigration system.
Teenagers, doctors, builders, moms,
dads—lots of ordinary people.
The housing market is going to be in crisis.
Who will build our homes?
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