Ontario Construction News staff writer
A U.S. Commerce Department report concludes that government should double the tariff on Canadian lumber from 9 to 18 per cent, to combat alleged unfair Canadian trade practices.
It’s a recommendation that has been criticized by the Canadian government and home builders on both sides of the border.
“If the administration’s decision to double tariffs is allowed to go into effect, it will further exacerbate the nation’s housing affordability crisis, put even more upward pressure on the price of lumber and force millions of U.S. home buyers and lumber consumers to foot the bill for this ill-conceived protectionist action,” Chuck Fowke, chairman of the National Association of Home Builders (NAHB), said in a May 22 statement.
Fowke says the decision came as the price per thousand board feet of lumber climbed to a record $1,515, according to industry trade publication Random Lengths – a 323 per cent increase since April 2020.
“At a time when soaring lumber prices have added nearly $36,000 to the price of a new home and priced millions of middle class households out of the housing market, the Biden administration’s preliminary finding yesterday to double the tariffs on Canadian lumber shipments into the U.S. shows the White House does not care about the plight of American home buyers and renters who have been forced to pay much higher costs for housing,” Fowke said.
“This action clearly shows the White House is disingenuous when it claims the nation’s housing affordability crisis must be an important priority. This move certainly demonstrates a lack of courage to stand up to the U.S. lumber lobby that is already reaping record profits off the backs of hardworking American families.”
The government argues that increases are needed to combat “unfair Canadian trade practices” in a U.S. Commerce Department report that concluded the country needs to double the tariff on Canadian lumber from 9% to 18%.
Before the hike, announced on May 21, could go into effect, it must go through a review process. Home builders, however, are already expressing dismay about the announcement.
“A level playing field is a critical element for continued investment and growth for U.S. lumber manufacturing to meet strong building demand to build more American homes,” Jason Brochu, U.S. Lumber Coalition co-chair, said in a news release.
“The U.S. Lumber Coalition applauds the Commerce Department’s continued commitment to strongly enforce the U.S. trade laws against subsidized and unfairly traded Canadian lumber imports.”
In 2017, the Donald Trump administration, citing unfair trade practices, oversaw an increase in the Canadian lumber tariff to 20%, but then cut the tarriff to 9 per cent at the end of 2020.
According to Fastmarkets, more than 25 per cent of lumber consumed in the U.S. comes from Canada.
“The administration should be ashamed for casting its lot with special interest groups and abandoning the interests of the American people. It knows that the lumber tariffs are nothing less than a tax on American home buyers, renters and businesses that rely on lumber products and they could not have come at a worse time,” Fawke concluded.
“Lumber prices are already up more than 300 percent from a year ago. If the administration’s decision to double tariffs is allowed to go into effect, it will further exacerbate the nation’s housing affordability crisis, put even more upward pressure on the price of lumber and force millions of U.S. home buyers and lumber consumers to foot the bill for this ill-conceived protectionist action.”