Navigating Tariffs: Why Remodeling Remains a Win

Tariffs 101: What’s at Stake?

Tariffs are taxes placed on imported goods—such as lumber, cabinetry, or flooring—intended to support domestic manufacturing. A 25% tariff on Canadian lumber or a 10% tariff on Chinese-made flooring and fixtures increases costs for importers, which may be passed along to builders and, eventually, consumers.
But here’s the key: Only about 7% of materials used in U.S. residential construction are imported. That means most remodeling projects are less exposed to major price hikes than many assume.
Here’s a quick look at where the U.S. sources imported building materials:

• Canada (8%) – lumber, steel, and wood products
• Mexico (11%) – cement, drywall components, and glass
• China (27%) – flooring, cabinets, lighting, and fixtures
  (Eye on Housing)

The Pricing Picture

While tariffs increase material costs, the actual effect on remodeling budgets is lower than expected.
Consider a $150,000 kitchen or bathroom remodel:

• Lumber makes up only about 1% of the total budget.
• Trim and casing account for roughly 2%.
• Cabinets are estimated at 2-3%.

Even if all these materials faced full tariffs, the overall project cost would rise by just 1.5-2%, or $2,250-$3,000.
Now compare that to new home construction, where raw materials account for a much larger portion of the budget. When tariffs drive up lumber, steel, drywall, and other structural materials, new home prices increase much faster than remodel budgets.
Additionally, many suppliers and contractors absorb part of these costs to stay competitive, reducing the immediate impact on homeowners.

Why Remodeling Wins

Several factors make remodeling the better financial decision for homeowners:
✔ Smaller tariff impact: Remodeling uses fewer raw materials, limiting exposure to the harshest cost increases.
✔ Stronger domestic supply chains: Many remodelers work with local suppliers or U.S.-based manufacturers, providing more stability.
✔ High mortgage rates: Homeowners with low-interest mortgages are choosing to stay put—making remodeling the cost-effective way to upgrade.
✔ Rising new home prices: Tariff-driven increases in new construction costs make remodeling look more attractive by comparison.

Turning Tariffs into a Sales Advantage

When clients express concern over rising material costs, we can respond with facts—and confidence:

• Remodeling is still the smarter financial move—tariff impacts remain modest compared to cost spikes in new construction.
• Smart material choices let us manage budgets without sacrificing design or quality.
• Domestic suppliers and reliable partners help insulate projects from global volatility.
• Remodeling is an investment—well-executed upgrades often retain or grow in value, making real estate a strong part of a balanced financial portfolio.

This is an opportunity for remodelers everywhere to lead with knowledge and clarity, reassuring clients that remodeling is a sound and strategic financial decision.

The National Takeaway

Whether you’re working in Minneapolis, Phoenix, or Boston, the story is the same: Tariffs may be in the headlines, but remodeling remains strong. While new construction faces steeper cost challenges, remodeling offers a more predictable, flexible, and cost-effective path forward.
At AMEK Design + Build—and for NARI members nationwide, this is a moment to shine. Let’s continue to educate clients, lead with confidence, and show that remodeling is not just resilient—it’s essential.

Want to share your experience or discuss regional trends?
I’d love to connect—reach out at www.linkedin.com/in/andrewpschmidt/

About the Author
Andrew Schmidt is the Owner/CEO of AMEK Design + Build in Bloomington, MN.
He is a past president of the NARI of Minnesota chapter.