Days after Trump delayed tariffs on Canadian softwood, lumber prices have started to fall—from a pandemic high of $682 per thousand board feet to $651 per thousand board feet. It comes as the construction industry feels the weight of tariffs on a range of building materials, with the National Association of Home Builders (NAHB) warning that tariffs could add $7,500 to $10,000 to the cost of a home.
And yet, despite lobbying the White House to pause the tariffs for at least another month, there are concerns that tariffs, coupled with the Department of Commerce ramping up duties on Canadian softwood, will inevitably lead to the cost of lumber spiralling out of control:
“This is going to be devasting for Canadian producers,” according to Dustin Jalbert, a senior economist for wood products at Fastmarkets, who said that the prospect of a 52% “tax” on softwood would be devasting for the North American supply chain. “No Canadian producer is making the margin to absorb that.”
Speaking to the Financial Times, Mr Jalbert said that the lumber tariffs would exacerbate a US housing industry already constrained by high interest rates and labour shortages—a one-two punch that will worsen with Trump’s crackdown on undocumented migrants: “(Builders) are getting hit from all angles right now.”
It comes as Canada, which accounts for 84% of all imported lumber into the United States – has been hit with a new round of Chinese tariffs (albeit focused on farm and food products for now), the latest in rounds of tariff announcements from the US, China, Canada and Mexico.
Last week, Wood Central reported that Canada could look to Asian markets – namely China, Japan and South Korea – to offset losses in the United States: “In China, where Russia supplies nearly 68% of softwood lumber imports, Canada holds a 7.5% share. If Canadian exporters divert shipments from the US to China, they could challenge Russian dominance,” according to Russian-based Lesprom.
