In 2016, towards the top of the Obama administration, the American lumber business petitioned the federal government to impose duties on Canadian softwood lumber imports in response to what it contended have been unfair commerce practices. The proceedings continued underneath the Trump administration, which in 2017 imposed duties of 20.2 % for many Canadian producers. The speed was lowered to 9 % final yr.
The standing of the long-running dispute took on a brand new urgency as the worth of lumber soared over the previous yr. The Nationwide Affiliation of Dwelling Builders estimated in April that increased lumber prices had added nearly $36,000 to the worth of a median newly constructed single-family residence. A benchmark for the worth of framing lumber set a file excessive of $1,515 per thousand board ft in Might, 4 instances the worth firstly of 2020, earlier than starting to plummet. Final week, the worth stood at $930, nonetheless greater than double its stage in the beginning of 2020, in line with Fastmarkets Random Lengths, the commerce publication that publishes the benchmark.
“As an economist, it is rather arduous to grasp why we’re taxing one thing we don’t produce sufficient of,” stated Robert Dietz, the chief economist for the Nationwide Affiliation of Dwelling Builders.
On the opposite facet of the difficulty are U.S. lumber producers. The U.S. Lumber Coalition, an business group, has argued that sturdy demand, not duties, is driving lumber costs and that the duties make up solely a small portion of the overall price of lumber for brand new houses.
The coalition credit the duties with strengthening the U.S. lumber business, saying in an announcement that American sawmills had expanded capability in recent times, producing an extra 11 billion board ft of lumber since 2016. “Extra lumber being manufactured in America to fulfill home demand is a direct results of the commerce enforcement, and the U.S. business strongly urges the administration to proceed this enforcement,” the coalition stated.
Dustin Jalbert, a senior economist at Fastmarkets, a value reporting agency, attributed the chaotic lumber market and excessive costs largely to results from the pandemic. Initially of the pandemic, he stated, sawmills “assumed the worst” and curbed manufacturing, just for the housing market to rebound and for demand to soar.
Mr. Jalbert stated the duties stemming from the U.S.-Canada dispute weren’t a significant cause for the excessive costs. “By way of the short-term pricing state of affairs, it’s decrease down the record by way of the elements which can be driving the file costs that we’ve seen out there,” he stated.