New Lumber Tariffs Expected to raise Lumber Prices

The United States Department of Commerce announced the final tariffs on imports of softwood lumber from Canada last week. The tariffs are in response to what the U.S. says are Canadian lumber mills benefiting from improper subsidies, which is in turn hurting American mills that are competing with the Canadian lumber yards.

The news of the tariffs was met with disappointment from members of the National Association of Home Builders (NAHB), who feel they will artificially boost the price of lumber, which will be felt by homeowners looking to rebuild in the wake of devastating hurricanes and wildfires in California.

According to the NAHB, more than 95% of imported lumber last year came from Canada.

“Canada and the U.S. need to work cooperatively to achieve a long-term, stable solution in lumber trade that provides for a consistent and fairly priced supply of lumber” said NAHB Chair Granger MacDonald.

In response to the new tariffs, the U.S. Department of Commerce released the following statement from Commerce Secretary Wilbur Ross:

“While I am disappointed that a negotiated agreement could not be made between domestic and Canadian softwood producers, the United States is committed to free, fair and reciprocal trade with Canada. This decision is based on a full and unbiased review of the facts in an open and transparent process that defends American workers and businesses from unfair trade practices.”

According to statistics released from the U.S. Department of Commerce, “Canada is providing unfair subsidies to its producers of softwood lumber at rates from 3.34 percent to 18.19 percent.”

Negotiations have been ongoing for roughly three decades, after charges were first formally filed in the 1980’s. Over that time period, numerous petitions have by filed by U.S. firms and the last agreement expired in 2015.

The International Trade Commission will have the final say in pushing the tariff through, but the decision last week by the Commerce Department is a strong indicator that there are few options left.