Governor Katie Hobbs Warns New Tariffs Will Drive Up Arizona Housing Costs

Governor Katie Hobbs is speaking out against new federal tariffs that she says will worsen Arizona's already expensive housing market for families trying to buy homes.

"Housing prices are already sky-high, and this new 10% lumber tariff will only drive them up further," Hobbs shared on X. "Instead of delivering relief, this new tax will put home ownership out of reach for even more Arizonans."

Her warning comes after the U.S. Commerce Department announced sweeping tariffs on building materials on September 29. The Department imposed a 10% tax on all timber and lumber imports, claiming these materials pose a national security risk. 

Governor Hobbs worries that Arizona's housing market will stoop lower because the United States doesn't produce enough lumber to meet its own needs. America imports about one-third of all the lumber it uses, with 85% of those imports coming from Canada. 

Canadian lumber now faces a combined tariff rate exceeding 45%, including the new 10% tax on top of existing duties that were already raised to 35% earlier this year.

Lumber Investigation

The tariffs stem from an executive order signed back in March, when President Donald Trump directed the Commerce Department to investigate whether lumber imports threaten national security. The administration argued that foreign countries were dumping subsidized wood products into the U.S. market and needed to protect its domestic lumber industry.

The investigation led to the September tariff announcement under a 1962 law that allows the President to restrict trade for national security purposes.

Reports also claim Canadian lumber is unfairly subsidized and that the tariffs will protect American lumber companies. 

Industry experts warn it will take years before domestic lumber production can meet American demand, meaning imports remain essential for building and remodeling homes in the meantime.

The tariffs took effect this week, adding financial pressure to Arizona families already struggling with some of the nation's highest housing costs.