Tariffs Trouble?
Sweeping Tariff Policy Changes Elevate Uncertainty
- New executive order raises the U.S. effective tariff rate from 2.5% to 24%, the highest in over a century
- Country-specific tariffs hit China hardest at 54%, with steep rates also imposed on Vietnam, Taiwan, South Korea, Japan, and the EU.
- Product-specific tariffs include 25% on steel, aluminum, autos, and potentially pharmaceuticals, semiconductors, and lumber
CRE Outlook Increasingly Choppy Over Short-Term
- Higher inflation and slowing economic growth may slow job creation, spending, and household formation — reducing apartments, retail, and industrial space demand
- Tariffs will, however, also increase construction costs, mitigating new supply risk
CRE Opportunities
- Brief window of lower interest rates on debt financing
- Historically, CRE outperforms in times of economic turbulence, rising inflation and financial market distress
China based on previous 20% tariff imposed
Sources: Marcus & Millichap Research Services, White House
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