In 2016, before the end of the Obama administration The American lumber industry has petitioned the government to impose tariffs on Canadian softwood imports in response to what it argues for unfair trade practices. Litigation continues under the Trump administration, which in 2017 imposed 20.2% duties on most Canadian producers. This rate dropped to 9 percent last year.
The state of the long-running dispute has given rise to new urgency as timber prices soared over the past year. The National Association of Home Builders estimated in April that higher lumber costs had added nearly $36,000 to the average price of newly built single-family homes. The benchmark for lumber prices hit a record high of $1,515 per thousand feet in May. That’s four times the price at the start of 2020 before it started to plummet. Last week, the price was $930, which is still more than double at the start of 2020, according to Fastmarkets Random Lengths, the benchmark trade publication.
“As an economist It is very difficult to understand why we are not taxing enough on what we produce,” said Robert Dietz, chief economist at the National Association of Home Builders.
On the other side of the problem is the US lumber producer, the US Lumber Coalition, an industry group. has argued that strong demand not duty is driving wood prices And duty is only a small fraction of the total lumber cost for a new home.
The alliance credits the role with strengthening the US lumber industry. It said in a statement that America’s sawmills have been expanding production in recent years. It produced an additional 11 billion feet of lumber since 2016. “The more wood produced in America to meet domestic demand is as a direct result of trade enforcement and US industry I urge the administration to continue this enforcement action,” the coalition said.
Dustin Jalbert, senior economist at Fastmarkets, a price reporting company. It states that the busy timber market and high prices are largely the result of the epidemic. At the start of the pandemic, he said, the sawmill was “the worst” and production was limited. Just for the housing market to recover and for the increased demand.
Mr Jalbert said the duties arising from the dispute between the United States With Canada, that’s not the main reason for higher prices. “In terms of the short-term pricing situation, The list will be lower in terms of factors driving record prices we have seen in the market,” he said.