A new US-Canada battle will drive up lumber prices

November 9, 2021

By: The Working Forest Staff

POYNTER.ORG — The United States is preparing to double a tariff on Canadian softwood, which will touch off another battle that will make lumber more expensive. Right now, lumber future prices are about twice what they were before the pandemic began and supplies in the southern U.S. are getting tighter. That will drive up prices even more.

This disagreement between neighbors has to do with allegations that the U.S. has made for years that Canadian wood is unfairly subsidized, which makes it cheaper for U.S. buyers but forces down U.S. lumber. This battle has been going on since Ronald Reagan was in office. In 2017, Donald Trump imposed tariffs on Canadian lumber and now, with supplies tight and people hollering about the rising price of everything, the U.S. Department of Commerce says it plans to raise duties from the current 9% to 18.3%.

The New York Times explains the historic battle:

The United States and Canada have been at odds over lumber since the 1980s. The saga has gone on for so long that lumber disputes over the years are commonly referred to with Roman numerals, akin to the Super Bowl. The current dispute is called Lumber V; Lumber IV took place during the George W. Bush administration.

The friction between the United States and Canada over softwood lumber stems in large part from the differences in how timber is harvested in the two countries. While most timberland in the United States is privately owned, most of Canada’s forestland is publicly owned, and companies pay fees set by provincial governments to harvest timber from their land.

While Canadian lumber mills have profited recently, the governments have kept lease rates low, which makes it more difficult for U.S. producers to compete.

Lumber prices have taken a roller coaster ride in the last year and a half. In the spring of this year, prices spiked, then dropped and are now heading back up. In some cases, homebuilders say, the cost of building a house went up $35,872 just because of the price of lumber. The National Association of Homebuilders says when you consider the cost of lumber for companies who are building apartment complexes, “Tenants are paying $119 more a month to rent the average new apartment due to the past year’s surge in lumber prices.”

The U.S. Lumber Coalition claims:

Canada’s lumber subsidies are threatening America’s Main Street economy. This is an issue of jobs, fairness in trade, and economic stability for thousands of communities and hundreds of thousands of hardworking families across the U.S.

Canadian lumber mills receive government subsidies, among them below-market harvesting fees from publicly owned land. Canadian softwood lumber producers unfairly outcompete American producers and dump their artificially cheap softwood lumber in the U.S. market, putting U.S. lumber mills — which, unlike Canadian Mills, operate under a free market — at a fundamental competitive disadvantage. Because of unfair trade, U.S. mills lose sales, causing difficulty in maintaining production and employment levels. This harms communities all across the country and damages the overall U.S. economy.

See more HERE.

 

 

Your comments.

  1. george delisle says:

    It is high time that Trudeau shows some courage over this issue. Maybe Canada should slap a 18% tariff on all fossil fuel exports to the US or some other commodity that the US needs badly. The US is not a good neighbor and it is high time that we recognize that and discourage all travel to the US unless it is essential. It is time that we try to get the people living in the US that depend on Canadians to stand up and support us. George Delisle

Your #1 source for forestry and forest industry news.

Built by Sofa Communications