01:22 PM EDT, 04/04/2025 (MT Newswires) -- Building products companies and homebuilders in the US face "significant" earnings headwinds through 2026 as President Donald Trump's new tariffs could exacerbate existing challenges for an already weak housing market, RBC Capital Markets said in a note emailed Friday.

Home and security products manufacturer Fortune Brands Innovations ( FBIN ) , home improvement and and building products company Masco ( MAS ) and home appliances producer Whirlpool (WHR) are the most exposed to imports from China.

Trump announced 34% tariffs on the Asian country this week, in addition to the 20% duties imposed earlier. China said Friday it will impose its own 34% tariffs on US imports.

The 54% tariff rate on Chinese goods could result in a direct margin pressure of about 160 to 370 basis points for Fortune Brands, Masco ( MAS ) and Whirlpool, RBC said. The Chinese tariffs could reduce 2025 earnings per share by up to 15% to 30% for the most impacted building products companies in RBC's coverage, led by Whirlpool.

"We view the new tariffs as a clear net negative to housing given fragile affordability/demand, offsetting lower rates," RBC analyst Mike Dahl said. "We see significant earnings risk to (2025/2026) if these tariffs hold as sufficient pricing power likely proves difficult."

Dahl anticipates a net negative impact on flooring manufacturer Mohawk Industries ( MHK ) and Whirlpool, though he said the two could be viewed by investors as "relative beneficiaries given greater domestic footprints (versus) competitors." Vulcan Materials ( VMC ) is likely a "relative 'winner,'" he said.

Tariffs were a key topic during the fourth-quarter earnings season, but companies' guidance assumed a 10% tariff rate on China, according to the brokerage.

"We have significantly increased our flexibility and reduced our tariff exposure from China, but the line of sight to a path to reduce this exposure to less than 10% of total costs by the end of 2025," Fortune Brands Chief Executive Nicholas Fink said during an earnings call in February, according to a FactSet transcript.

Masco ( MAS ) was looking to import roughly $450 million from China this year, which represents a reduction of about 45% since 2018, Chief Financial Officer Richard Westenberg said in February. "The overall tariff environment remains highly uncertain," he told analysts at the time.

Whirlpool CEO Marc Bitzer said late in January that more than 80% of the products the company sells in the US are domestically produced. "That is very different for our competitors," Bitzer said.

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