Donald Trump will follow through on his threat to hit Canadian (and Mexican) lumber with a 25% tariff after he today reiterated concerns around illegal migration, fentanyl and trade deficits: “I’ll be putting the tariff of 25% on Canada, and separately, 25% on Mexico, and we’ll have to do that,” Trump told reporters while signing executive orders on aviation.
In making the determination, Trump cited a “number of reasons” for doing so. “No. 1 is the people that have poured into our country so horribly and so much. No. 2 are the drugs, fentanyl and everything else that has come into the country. And No. 3 are the massive subsidies we are giving to Canada and Mexico in the form of deficits,” Trump said. Before adding that “those tariffs may or may not rise with time.”
“We have all the oil we need, we have all the trees we need, meaning the lumber.”
Donald Trump today stressed from inside the Oval Office that lumber will be one of the industries hit by tariffs starting tomorrow (Saturday, the 1st of February 2025).
As it stands, the United States already has imposed a 14.4% duty on $3 billion worth of Canadian lumber that crosses the border every year, which analysts expect could double to more than 30% if and when the US Department of Commerce imposes new duties on imported in response to a sharp drop in the price of Canadian timber (now down 70% from the 2021 peak).
During the same meeting, Trump said he was “thinking about (doing) something” on China because they’re sending fentanyl into our country, but he did not speak about when he might levy tariffs on Beijing or how high he would raise them. After winning the election in November, Trump threatened to impose a 10% tariff on Chinese imports.
The remarks come amid ongoing discussions between the Trump administration and Mexican and Canadian officials. They now seek to reassure the president that they are clamping down on border security to stave off the tariffs. Both countries have vowed to retaliate with tariffs if Trump follows through on his threats.
Trump initially vowed to impose those tariffs on his first day in office, but earlier this month, he appeared to backtrack and set a Feb. 1 deadline instead. For what it’s worth, Trump’s nominee for Commerce secretary, Howard Lutnick, also indicated at his confirmation hearing Wednesday that Canada and Mexico could avoid the threats and said the countries were making progress toward addressing border security concerns.
On Tuesday, White House press secretary Karoline Leavitt said Trump remains committed to new tariffs but added that they have seen a “historic level of cooperation from Mexico.” At a time when the White House is concerned about reducing high food prices, the threatened duties would hit more than $75 billion worth of agricultural imports from the two North American neighbours.
- 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. To learn more about the impact of Donald Trump’s tariff plan on global timber prices, click here for Wood Central’s special feature earlier this month.