North American Builder’s Supply, a longstanding Midwest lumber and materials provider based in Yorkville, Illinois, filed for Chapter 11 bankruptcy on December 3, 2025. The filing underscores how escalating tariffs, declining construction demand, and creditor pressures are straining regional suppliers amid a deepening housing affordability crisis.
The Company’s Quiet Collapse
For decades, North American Builder’s Supply delivered lumber, drywall, windows, and hardware to contractors across the Midwest. Known for reliability and competitive pricing, it operated without fanfare until financial strain became evident.
Court documents show liabilities between $1 million and $10 million exceeded assets of $500,001 to $1 million. The Chapter 11 reorganization, chosen by President Paul McCue, aims to restructure rather than liquidate, keeping operations ongoing amid the fallout.
Tariffs Escalate Costs
Canadian softwood lumber duties stood at 14.5% early in 2025. A proposed 25% tariff on all Canadian goods in March nearly doubled lumber levies, though delayed. By August, combined anti-dumping (20.56%) and countervailing duties (14.63%) pushed rates to 35.2%.
These hikes inflated inventory costs for suppliers like North American Builder’s Supply. Steel and aluminum tariffs hit 50% by June, compounding the burden on construction materials.
Contractors Absorb the Pain
Fixed-price contracts left contractors bearing rising costs. When demand softened, suppliers struggled to fulfill preorders due to limited capital and inventory.
Residential building starts fell 1% in November, with single-family starts up 5% but multifamily starts down 12%, according to Dodge Construction Network. Project abandonments jumped 41.1% month-over-month in November, the highest since July, as orders dried up while expenses peaked.
Creditors Close In
Lawsuits from creditors including Proventure Capital, Premium Merchant Funding, Quaker Window Products, Sherwood Lumber, and Orgill predated the filing. The bankruptcy lists 49 unsecured creditors, with the top three—Bluetape ($503,219), Kapitus ($149,596), and Central Bank Illinois ($94,131)—owed $747,000 total.
Bluetape, a financing platform advancing 85-95% of invoice values, froze credit when repayments faltered amid falling demand. This dependency on supply chain finance exposed vulnerabilities for regional players.
Housing Costs Surge
The National Association of Home Builders (NAHB) estimated March 2025 tariffs would add $7,500–$10,000 per home; lumber alone contributed $4,900 by April. Combined material increases reached $17,000–$22,000 against a $422,000 average home price.
Each $1,000 rise excludes approximately 115,000 potential buyers, displacing 1.8–2.3 million households from tariff effects alone. Families earning $75,000 now face $1,529 monthly payments, up from $1,432, adding $36,000 over 30 years.
Big Players Endure
National retailers like Home Depot posted $165 billion in fiscal 2025 revenue, sourcing over 50% domestically to sidestep tariffs. Lowe’s cut $400 million in inventory while acquiring $600 million more, leveraging scale for tariff clauses and buying power.
Regional suppliers, lacking such advantages, bear full inventory risks and compete on service, widening the gap in a consolidating market.
Ripple Effects Ahead
The bankruptcy disrupts Midwest contractors reliant on local suppliers for speed and flexibility, forcing shifts to larger chains with slower service and higher costs. With the ConstructConnect Project Stress Indicator at 125.7 in November—the highest level since July—further failures loom in 2026 absent tariff relief.
Industry consolidation will likely reduce competition, raise prices, and slow delivery. Persistent pressures threaten fewer projects and suppliers, amplifying unaffordability for millions while concentrating power among giants. Policy shifts could mitigate these strains, but regional communities bear immediate losses in jobs and stability.
Sources:
“Canadian Lumber Duties Jump Above 25% — With Higher Levies to Come.” National Association of Home Builders, July 27, 2025.
“Canadian Lumber Duties Hit 35% — And May Go Higher.” National Association of Home Builders,August 7, 2025.
“Cost and Tariff Uncertainty Weighs on Markets.” National Association of Home Builders, March 20, 2025.
“How Tariffs Impact Home Building.” National Association of Home Builders, November 11, 2025.
“Trump Steel Tariffs Expanded to Hit Home Appliances.” The New York Times, June 12, 2025.
“Tariff Woes Drive 41% Increase In Construction Project Abandonments and Delays.” Bisnow, December 8, 2025.