The Battle Over Lumber Prices and U.S. Trade Policy

Expectations of tariffs imposed on imports (particularly on wood products) produced conflicting arguments from different industries as well as different countries in late February as the Trump administration issued tariff threats on other countries and various industries.

Trump included “lumber” with semiconductors, pharmaceuticals, and autos on a list of products for which he is considering tariffs of 25% to be in place by April 1. However, he also hinted at the potential of relief from the tariffs for companies that move toward producing their products in the U.S. He has threatened 25% of added taxes on Canada but delayed the imposition of those duties on Canada and Mexico.

The National Association of Homebuilders, who recognize current home prices as an obstacle to making new housing more affordable, warned that tariffs would increase the cost of lumber, a prime cost factor in building a new house.

“Tariffs on lumber and other building materials increase the cost of construction and discourage new development, and consumers end up paying for the tariffs in the form of higher home prices. NAHB urges the administration to reconsider this action on tariffs, and we will continue to work with policymakers to eliminate barriers that make housing more costly and prevent builders from boosting housing production” NAHB Chairman Carl Harris said.

However, the U.S. Lumber Coalition said the impact of lumber costs on new home prices is minimal. “It simply is not credible to state that lumber cost drives housing affordability,” said a statement by the coalition.

“Since Canada relies almost exclusively on the U.S. market to unload its excess lumber production at any cost—for example, through massive dumping—this new U.S. self-reliance for its softwood lumber needs is causing panic within the Canadian lumber export industry,” said Zoltan van Heyningen, U.S. Lumber Coalition Executive Director. “This is why Canada and U.S.-based organizations parroting a ‘Canada First’ agenda are engaging in an aggressive campaign, widely pushing misinformation about the impact of U.S. trade law enforcement on U.S. housing costs.”