Market Reacts to Tariffs – Implications for CRE

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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