Massive price hikes on imported timbers are coming with Donald Trump, today (Australian time), vowing to introduce a 25% tariff on all goods coming from Canada and Mexico and a blanket 10% tariff on all incoming Chinese goods from his first day of office, January 20, 2025.
The move, President-elect Trump said, is in retaliation for illegal immigration and “crime and drugs” coming across the border:
“On January 20, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States and its ridiculous Open Borders,” Trump posted on his Truth Social platform. “This Tariff will remain in effect until Drugs, in particular Fentanyl and all Illegal Aliens, stop this Invasion of our Country!”
Trump said America’s neighbours can “easily solve this long-simmering problem.” Similarly, Trump said that China will face higher tariffs on its goods – by 10% above any existing tariffs – until it prevents the flow of illegal drugs into the United States.
“I have had many talks with China about the massive amounts of drugs, in particular Fentanyl, being sent to the United States – But to no avail,” Trump posted on Truth Social. The president-elect claimed that Chinese officials promised him the country would execute drug dealers caught funnelling drugs into the United States but “never followed through.”
The first round of Trump tariffs will strike the world’s largest trading block.
While most of the commentary around Trump’s tariffs has focused on America’s trade with China, the USMCA—the trading block combining the United States, Mexico, and Canada—accounts for around 30% of global GDP and has enormous implications for the worldwide trade of forest products. The US and Canada are the largest and fourth largest timber and pulp producers, respectively. Meanwhile, Mexico – the United States’ top buyer for lumber – is one of the international hot spots for illegal logging, trading 5 to 15 million cubic metres of illegal timber annually.
With more than US $3 billion in softwood lumber traded across the border, the United States and Canada have been parties to a four-decade-long trade dispute over softwood duties (which currently stands at 14.54%) – with the US Department of Commerce accusing Canada of dumping low-priced timber into the country.
Last month, Jason Morris, the University of Northern British Columbia’s UNBC Senior Political Science Instructor, warned that Trump’s tariffs could spell disaster for Canada’s (and British Columbia’s, more specifically) besieged timber industry: “We can keep an eye on our forestry policies in BC and the North to see how that goes, but with the slump in that industry, the negative impacts at present could be negligible should a new softwood lumber war emerge.”
Will tariffs drive up the cost of sustainable housing construction?
Speaking to Fast Company, Michael Eliason, an architect and principal at Larch Lab, said that the new tariffs will slow down the take-up of mass timber construction in projects:
“My guess is it that a 20% increase in material costs is going to see a lot of people clamouring for repealing green building and efficiency mandates to ‘lower cost.'”
Michael Eliason, an architect and principal at Larch Lab on the impact of Trump’s Tariffs on take up for mass timber construction projects.
As it stands, the vast majority of mass timber used in American projects tends to be imported. However, while recent efforts have been to revive and create domestic supply chains for this material in the Southeast and Pacific Northwest, much of the raw material used for these projects still comes from Canada and Europe. Most of the nearly 2,250-plus such projects in the US were made with imported wood.
During Trump’s previous administration, concerns over tariffs and trade wars on the mass timber supply led many to consider ramping up domestic manufacturing. There are signs that growth in the industry has spurred more investment to expand production capacity in the southeast US. But the mass timber industry in the US is “still in its infancy,” Pat Jolley, product manager for Forisk Consulting, told Fast Company. “However, it remains to be seen how the new trade policy impacts its growth.”
- 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.
