Last year, tariff turmoil poured cold water on a housing recovery. Could a repeat be in the cards for 2026?
United States president Donald Trump’s latest threat to slap a 100% tariff on all Canadian goods if Ottawa inks a trade deal with China raises the prospect that trade politics could once again sideswipe a fragile housing market recovery.
Canada’s housing rebound in 2025 has already been knocked off course as earlier rounds of US tariffs and retaliatory measures pushed up building costs, rattled manufacturers and weighed on consumer confidence.
The Canadian Real Estate Association (CREA) reported that national home sales and prices slipped through much of last year as buyers stepped back amid rising economic uncertainty and tariff‑linked job fears.
On Saturday, Trump warned on social media platform Truth Social that “if Canada makes a deal with China, it will immediately be hit with a 100% Tariff against all Canadian goods and products coming into the U.S.A.” He added that “if Governor Carney thinks he is going to make Canada a ‘Drop Off Port’ for China to send goods and products into the United States, he is sorely mistaken.”
Last week, prime Minister Mark Carney announced that Canada and China reached a preliminary accord to remove some trade barriers, with Beijing cutting tariffs on Canadian agricultural products and Ottawa boosting quotas for Chinese electric vehicles at a 6.1% most‑favoured‑nation rate.
Ottawa stressed that this is not a full‑blown free trade agreement.
“Canada’s government has transparently outlined that the agreement with China is fundamentally about domestic consumers and businesses in Canada and China, not schemes aimed at other markets,” Matthew Holmes, executive vice president and chief of public policy at the Canadian Chamber of Commerce, said.
“A structured and stable relationship with China or any other country ... are not to replace our deeply rooted relationship with the United States that continues to be overwhelmingly good for workers, consumers and North American competitiveness,” he said.
Tariffs have already been identified by many housing analysts as this year’s single biggest swing factor.
In an interview with Canadian Mortgage Professional late last year, REMAX Canada president Don Kottick said trade uncertainty kept the market in a holding pattern, noting that many buyers stayed on the sidelines.
Moreover, new US–Canada trade frictions are dampening hopes for a Canadian housing market rebound in early 2026, while RBC said the trade war is derailing what is shaping up to be a solid recovery in housing activity.
Carney has indicated that Canada has no intention of pursuing a full free trade agreement with China for now, a stance that could limit the immediate risk of a 100% tariff shock.
Still, with Trump’s trade posture already associated with softer resale activity, higher construction costs and weaker sentiment, mortgage professionals entered 2026 knowing that policy uncertainty south of the border remains one of the biggest threats to any sustained housing recovery.
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