Just days out from Donald Trump’s inauguration, the threat of tariffs on Canadian lumber has sparked fears of panic buying, a move that is already starting to agitate the global timber market and prices. “A number of Canadian lumber companies are now advising customers that they will add 25 per cent to lumber exports to the U.S. when the tariff is announced,” according to Russ Taylor, who last week wrote about the impact of tariffs on the timber supply chain.
“With Canadian mills already paying an average of 14.4 per cent import duties on U.S. shipments, they have no alternative but to increase prices by 25 per cent to cover the potential tariff.”
The new tariff concerns – which will have significant implications for the $50 billion global timber trade – come after Wood Central reported that duties on more than $3 billion worth of US-bound Canadian softwood could double to more than 30%. According to the Canadian-based Globe and Mail, this projection is “based on a historical pattern of higher duties whenever there are low prices in the lumber markets.”
“We don’t need their <Canadian> lumber. We have massive fields of lumber. We don’t need their lumber. We have to unrestrict them because stupid people put, you know, restrictions on – but I can do that with an executive order. We don’t need anything they have (…referring also to cars and dairy, but not oil).”
President-elect Donald Trump on potential trade tariffs on Canadian lumber.
“The bottom line (is that) the US need Canadian lumber and OSB; (and) Canada really needs the US lumber and OSB market,” according to Mr Taylor, adding that “Canadian exports of MDF and particleboard go mainly to the US (98% of total exports) while plywood exports to the US are small at 300 million sf and represent about 3% of US consumption.”
“So, waiting to see what Trump will do with 25% tariffs has already spooked the markets,” he said. “Let us see what Trump’s strategy really is, as the tariffs will backfire very quickly if implemented, causing higher prices and inflation and the potential of shortages and job losses.”
- For more information, including estimates around the size of the Canadian-US trade in lumber and OSB, click here to visit (and subscribe) to the Russ Taylor Global newsletter. To learn more about the North American softwood lumber dispute and its impact on the price of Spruce-Pine-Fir (SPF) and Southern Yellow Pine (SYP), click here for Wood Central’s special feature.