Trump has threatened, but not yet imposed, further import taxes on lumber. The president has ordered a national security investigation into US imports of wood and has said the US doesn’t need Canada’s. But US homebuilders have warned that more tariffs will only drive up the cost of new housing.
ALSO READ: Trump to China: Tame the Dragon in 24 hours or face further 50% tariffsThe current duties are the result of a trade dispute between Canada and the US that has been dragging on for decades. The US claims Canadian sawmills are subsidised because forests north of the border are largely owned by provincial governments, which they allege set low fees, known as “stumpage” rates, to undercut the market. Canada denies this.
“Our stumpage system is grounded in market principles, with timber sold through open, competitive auctions,” Kurt Niquidet, president of the British Columbia Lumber Trade Council, said in an emailed statement.
That’s separate from the barrage of tariffs being imposed by the White House in Trump’s second term, which include tariffs on Canadian products that aren’t in compliance with the US-Mexico-Canada trade accord and separate 25% tariffs on steel, aluminum and automobiles.Lumber is a major industry in Canadian provinces including British Columbia and Quebec. British Columbia Premier David Eby said he will discuss the new duties with Prime Minister Mark Carney on Monday and called the new rates “an attack on forest workers and British Columbians,” adding they’d increase housing costs “for Americans who voted for a president who promised to lower costs.”
Canada’s practices cause “everyday egregious harm to the US industry,” US Lumber Coalition Chairman Andrew Miller said in a statement. “These unfair trade practices are designed by Canada to maintain an artificially inflated US market share for Canadian products and force US companies to curtail production, thereby killing US jobs.”
New duties come on the back of other pressures such as higher input costs, wildfires, and a mountain pine beetle outbreak that has affected tens of millions of acres of forests in western Canada.
In Quebec, the second-largest producing region in the country, industry executives are struggling to see past the pressures and now a wall of US trade barriers.
“At today’s prices, it’s an unequivocal dead end,” said Frederic Verreault, vice president of corporate affairs at Les Chantiers de Chibougamau Ltee., a major Quebec wood processor selling roughly half of its products to the US.
“A two-by-four piece will sell for about C$3 ($2.11) today, but the same piece was selling for more than C$10 in 2022, even though our production costs have risen.”
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