Days after President Trump enacted 10 percent trade tariffs on all Chinese goods in early February, Bentley Zhao called the company that supplies his cabinetry, tiles and stone. The store manager told him to expect to see a 10 percent price increase for any materials coming from China.
Mr. Zhao, the chief executive of New Empire, which builds high rises in New York City, was stunned to see the impact materialize so quickly.
“It’s too fast,” said Mr. Zhao, 46. “There’s no time.”
Chinese materials account for about a quarter of the $15 million materials budget for a 19-story condo, like the one he is currently building in Queens Plaza in Long Island City, Mr. Zhao estimated. A 10 percent increase would add around $375,000 to the overall budget, a manageable increase for a large project, he said. But Mr. Zhao is worried about larger tariffs to come.
On Thursday, Mr. Trump announced sweeping plans for reciprocal tariffs that could upend global trade, and the home building industry is bracing for the impact. Some builders and developers say they are beginning to feel the squeeze: They have received contracts with escalation clauses to account for increased costs; waited as their suppliers delay updated price sheets for imported goods; and received bids that are only good for two weeks when typically they would hold for two or three months.
“If they increase an extra 30 percent or 60 percent like what the president said before, that will be trouble,” said Mr. Zhao, who develops mostly moderately-priced condos throughout the city. Mr. Zhao is a frequent political donor whose donations to President Trump include a $25,000 contribution in 2017 to his Victory Fund. The New Empire website has pictures of Mr. Zhao at various fund-raisers and events standing alongside Mr. Trump, former Vice President Mike Pence, and Eric Adams, who received donations from Mr. Zhao. (There is also a photo of President Joe Biden, who gave Mr. Zhao a lifetime achievement award for community service. Mr. Zhao has headed his family business since 2004.)
Mr. Zhao, who was born and raised in China, said his support for Mr. Trump has not wavered — and would not even in the face of more severe tariffs — because he thinks the president’s immigration policies will make the country safer. The looming price increases, he said, are worth the trade-off.