The Liberation Day Hangover

Apr 3, 2025

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If there is one thing that has dominated conversations over the past few weeks in the world of new construction and development, it has been the impact of tariffs and global trade on new construction projects.

Yesterday the President outlined his administration’s plan for tariffs by country, along with some special provisions for the automotive industry.

We also don’t know what the international response will be from China, Germany, Japan, Korea Vietnam and many others.

There were a few countries that have been making headlines over the past two months, specifically Canada and Mexico. Yet these two countries were noticeably absent from the countries subject to the newly announced tariffs from the Rose Garden address on April 2.

That isn’t to say that Canada and Mexico are fully off the hook when it comes to tariffs. The automotive, steel and aluminum tariffs are still in place. The White House fact sheet says that tariffs affecting Canada and Mexico will not be stacked on top of existing tariffs. As you can imagine, this is a fluid situation and we might see further clarifications in the coming days and weeks. But that is what we know right now.

As I’ve been saying for some time, the biggest impact on real estate investors will be the flow of capital in the bond market which directly affects the cost of borrowing for real estate investors. Retaliation from trading partners that impacts treasury yields will have a larger impact than any tariffs. So far since the start of the week, we have seen treasury yields on the 10 year bond fall from 4.36% to 4.07%. In addition to monitor pricing due to tariffs, I'll be paying attention to the bond market.

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