US homebuilders are staring down their sharpest framing lumber squeeze in years, with Canadian softwood imports crashing 24 per cent in the first quarter as Trump-era tariffs and stacked duties hit an effective 45 per cent for many cross-border producers. That is according to fresh trade data published this week, which shows Canada still supplied 84 per cent of the US import market — but at a price gap that has left no cheap substitute on the shelf as Canadian volumes fall.
The Random Lengths Framing Lumber Composite has surged more than 30 per cent off December lows, with sawmill closures, falling production and reduced Canadian shipments pushing the rebound. Canadian mills still moved 5.2 million cubic metres into the United States in those three months — almost 16 times Germany’s 330,000 cubic metres, the next-largest source — while Sweden and Brazil sent 213,000 and 78,000 cubic metres respectively.
The price gap underlines what is at stake for US homebuilders, with Canadian softwood lumber clearing the border at about US$165 per cubic metre across the quarter, half the average price of the next-cheapest source. German, Swedish and Brazilian lumber averaged between US$274 and US$307 per cubic metre, leaving the US framing supply without a cheap substitute as Canadian volumes fall under the tariff wall.
The pain is now showing across the entire US construction input picture, with Anirban Basu, chief economist at Associated Builders and Contractors, telling the Wall Street Journal that the four months to April had outpaced the previous three years combined for cost increases. The National Association of Home Builders separately reported that 70 per cent of respondents to its April builder-confidence survey were struggling to price new homes amid the uncertainty over material costs.
“Market conditions remain challenging,” the NAHB’s Buddy Hughes said.
The 45 per cent effective rate stacks long-running antidumping and countervailing duties on Canadian softwood lumber on top of Trump-era tariffs, with a recent US Department of Commerce preliminary determination signalling that combined duties will fall to about 25 per cent from about 35 per cent later in the year. Builders are not banking on relief — the cut is expected to come too late to ease pressure on the current building season.
For Canada, the squeeze has hardened into an industrial-policy problem, with Energy and Natural Resources Minister Tim Hodgson telling the Empire Club of Canada that the country’s forest sector was “really the canary in the coalmine when it comes to American tariffs.” Ottawa’s new national Forest Strategy now commits to pivoting export strategy away from the United States and toward Asia after five separate tariff wars hammered cross-border lumber flows.
PulteGroup executives told investors that higher wood and metal prices would carry through to the cost of homes the company sells later this year, with the builder also resisting fuel surcharges from suppliers after diesel prices climbed about 50 per cent since the Iran war began at the end of February. Wood Central understands the surcharge pressure now stretches across the US homebuilder logistics chain, with materials margins eroding before the peak of the current building season.
The squeeze on building materials runs far wider than lumber, with copper at record prices on artificial-intelligence data-centre demand and ongoing disruption at Freeport-McMoRan’s Grasberg mine in Indonesia. Aluminium prices sit near records on a US tariff premium, whilst Persian Gulf war pressure on sulfuric acid for copper processing has added a further constraint, and the conflict has cut about 20 per cent of global oil supply, pushing diesel and freight rates higher and adding to wallboard shipping costs at suppliers including Eagle Materials.
The average rate on a 30-year fixed mortgage reached 6.51 per cent last week, the highest level since August, according to Freddie Mac, even as institutional investors continue buying close to one million acres of US timberland a year on a bet that the long-delayed US housing recovery is finally drawing near.
