Navigating Client Concerns About Trump's Tariffs

As Trump's April 2nd tariffs on Canadian goods approach, many of your clients are likely sitting on the fence, nervous about making real estate moves during economic uncertainty. 

This hesitation is completely understandable – but it also creates an opportunity for you to demonstrate your value as a trusted advisor. This guide offers straightforward strategies to help you address client concerns while keeping transactions moving forward during these turbulent economic times.

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Making Sense of the Tariff Situation for Your Clients

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When clients ask about these tariffs, they need simple explanations, not complex economics. Here's what's happening: As of March 7, 2025, President Trump has delayed or reduced tariffs on many Canadian goods until April 2nd, particularly those complying with the Canada-US-Mexico Agreement (CUSMA). However, Canadian products outside CUSMA preferences still face significant tariffs – 25% for most goods and 10% for energy products.

In response, Canada didn't sit quietly. On March 4th, the Canadian government implemented 25% tariffs on $30 billion worth of US imports, including everyday items like orange juice, wine, and various consumer goods. They've also made it clear they're prepared to expand these countermeasures to $155 billion if US tariffs continue.

For real estate specifically, these tariffs target construction materials like lumber, steel, and aluminum. This matters because construction costs directly impact housing prices, especially for new builds and renovations. Some regions will feel this more than others – manufacturing-heavy areas like Ontario and Quebec might see stronger effects than energy-producing provinces.

When explaining this to clients, avoid economic jargon. Simply put: "These tariffs are creating temporary uncertainty in construction costs, which may affect some property values and construction timelines in the short term."

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How Construction Material Availability Affects Your Clients

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The tariffs are creating interesting ripple effects in construction material markets that directly impact your clients' decisions. In the immediate term, Canadian suppliers of materials like softwood lumber might actually have excess inventory as US demand decreases. This could temporarily benefit Canadian builders who act quickly.

However, this situation won't last forever. Producers will likely adjust their output in response to changed demand, eventually leading to reduced availability and higher prices. For clients considering new construction or major renovations, timing becomes crucial.

Regional differences matter too. Vancouver Island's construction association has highlighted concerns about supply chain disruptions that could slow projects in their area. Urban centers with diverse supplier networks might adapt more easily than remote areas dependent on established supply chains.

When discussing this with clients, focus on the practical: "While there may be some short-term material bargains, we should account for potential future increases in construction costs when evaluating properties needing significant work."

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Talking Points for Hesitant Clients

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Your clients need reassurance without sugar-coating. Here are straightforward talking points to address their most common concerns:

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For clients worried about market crashes: "Real estate typically responds more slowly to economic events than stock markets. While we may see some price adjustments, the fundamental housing shortage in many Canadian markets remains unchanged."

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For clients concerned about rising costs: "Yes, construction costs may increase for new homes, which actually makes existing properties potentially more valuable since they were built with pre-tariff materials."

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For clients worried about mortgage rates: "Economic uncertainty often encourages central banks to hold steady on interest rates. In fact, this situation might delay rate increases that were previously expected."

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For clients concerned about timing: "Market uncertainty creates both risks and opportunities. Fewer active buyers can mean less competition and more negotiating power for those willing to move forward."

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The key is honesty with perspective. Acknowledge concerns while helping clients see the complete picture. Remind them that real estate is typically a long-term investment that weathers short-term economic fluctuations.

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Practical Transaction Strategies During Uncertainty

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Beyond just talking points, offer tactical approaches to help transactions move forward:

For Buyers: Consider including contingency clauses that address specific tariff-related concerns. For example, if a client is buying a pre-construction property, you might negotiate a clause that caps their exposure to construction cost increases related to tariffs. Help buyers prioritize properties that are less vulnerable to tariff impacts. Existing homes with recent renovations offer more price certainty than properties needing extensive work or new constructions with incomplete material orders.For those considering new builds, suggest locking in material prices with builders now rather than leaving them open to future increases. Some builders might be willing to guarantee current prices for a limited time to secure contracts.

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For Sellers: If clients are selling properties that would require significant renovation, help them understand how to position these honestly while highlighting other benefits. If sellers are under financial pressure or have a considerable concern about job loss, the time to list and sell may be now.  Despite forecasted interest rate reductions, given the barrage of changes with Trump's tariffs, the uncertainly and impact are projected to last well beyond April 2nd.

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For Homeowners: Mortgage Considerations in Uncertain Times For mortgage brokers specifically, this environment creates particular challenges and opportunities. When discussing financing options with clients: Emphasize that while economic uncertainty exists, mortgage rates don't automatically rise during trade disputes. In fact, if economic growth slows, it could potentially keep rates lower for longer. With pending BoC announcements, we may see rates come down considerably over the next few quarters, and with bond yields being impacted, fixed rates are also coming down, with rates as low as 3.99% becoming commonplace. Help clients understand the trade-offs between variable and fixed-rate mortgages during uncertainty. While fixed rates offer certainty, they may come at a premium that isn't necessary if trade tensions resolve quickly. Consider suggesting slightly more conservative loan-to-value ratios for properties most vulnerable to tariff impacts, such as pre-construction purchases where final costs remain uncertain. For clients worried about job security in industries directly affected by tariffs, discuss mortgage insurance options, debt consolidation, or payment flexibility features that might provide peace of mind.

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Preparing Clients for Multiple Scenarios

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Rather than predicting a single outcome, help clients prepare for different possibilities:

Scenario 1: Tariffs resolve quickly – Markets return to previous trajectories, possibly with a brief surge in activity from previously hesitant buyers all entering the market simultaneously.

Scenario 2: Extended tariff situation – Construction costs increase moderately, creating stronger demand for existing homes while new construction slows.

‍Scenario 3: Escalating trade tensions – Broader economic impacts could affect employment in certain sectors, potentially softening demand in some markets while creating opportunities in others.

For each scenario, help clients think through their specific situation. A first-time homebuyer might approach these scenarios differently than someone downsizing for retirement.

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Staying Informed Without Creating Panic

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Your clients look to you as their information filter. Create a simple system to stay updated:

Subscribe to reliable Canadian real estate and economic newsletters that provide balanced analysis rather than sensational headlines.

Consider creating a brief monthly email update for clients summarizing relevant developments in plain language.

Join or create a small group of fellow professionals to share insights and strategies, keeping everyone better informed without duplicating effort.

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Finding Opportunity in Uncertainty

While tariff uncertainty creates challenges, it also highlights the essential value you provide as a real estate professional. In complex times, clients need trusted advisors more than ever.

Remember that real estate markets have weathered numerous economic events over the decades. Those who can see past short-term noise to focus on fundamentals often find opportunities others miss.

By addressing client concerns honestly, offering practical strategies, and maintaining a balanced perspective, you can help clients make confident decisions even during uncertain times. The professionals who thrive during this period will be those who combine knowledge with empathy, turning hesitation into thoughtful action.

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