The emerging U.S.-Canada trade war could result in a housing-start slowdown north of the border, the Canadian Home Builders’ Association warned Tuesday.

CHBA CEO Kevin Lee issued the warning during a news conference in Ottawa. His comments came after U.S. President Donald Trump implemented his long-threatened 25% tariffs on imports from Canada and the federal government responded with matching retaliatory levies.

“We still have a bit of a slow market despite the fact that interest rates are coming down and we would expect that’ll continue to worsen as the trade war continues, if it does,” Lee told reporters. 

He said the U.S. tariffs will have a “muted” effect on the housing market, while the impact of the U.S. tariffs and the Canadian retaliatory measures on this nation’s economy will hurt more.

Lee called for the federal government to reduce the retaliatory measures to reduce the broader economic impact. The effects have already started, because consumers have lost confidence in investments, he added.

As he had promised, Prime Minister Justin Trudeau fired back with $30 billion worth of immediate tariffs on U.S. imports from Canada. The countertariffs are set to rise to $155 billion in three weeks.

“This is a very dumb thing to do,” Trudeau said of the U.S. tariffs during a news conference in Ottawa. “We two friends fighting is exactly what our opponents around the world want to see.”

Trudeau said the U.S. government’s decision to launch the trade war will “first and foremost” hurt American families.

Meanwhile, provincial and territorial governments also began to take steps to counter the U.S. levies.

Ontario Premier Doug Ford said the province plans to impose a 25% tariff on its electricity exports to three U.S. states: New York, Michigan and Minnesota.

And, at Ford’s direction, the provincially owned LCBO immediately began to remove U.S. liquor from its stores’ shelves.

In B.C., Premier David Eby ordered the removal of liquor from all “Red” states governed by Republicans. Eby had introduced the measure in February before almost immediately pausing it as Trump delayed his tariffs.

The B.C. government will also prioritize Canadian businesses and other groups for provincial procurement but Eby did not provide specifics. He had issued the same order in February before pausing it.

“Obviously all bets are off,” he told reporters.