Tuesday, April 25, 2017

Canadian Lumber Prices About to Skyrocket

Trump Slaps Duty on Canada Lumber, Intensifying Trade Fight
by Jennifer Epstein  and Joe Light for Bloomberg Politics

Step will raise cost of home-building, mattress box springs
Canada vows to fight back against ‘unfair” import duties
U.S. President Donald Trump intensified a trade dispute with Canada, slapping tariffs of up to 24 percent on imported softwood lumber in a move that drew swift criticism from the Canadian government, which vowed to sue if needed.

Trump announced the new tariff at a White House gathering of conservative journalists, shortly before the Commerce Department said it would impose countervailing duties ranging from 3 percent to 24.1 percent on Canadian lumber producers including West Fraser Timber Co.

“We’re going to be putting a 20% tax on softwood lumber coming in -- tariff on softwood coming into the United States from Canada,” Trump said Monday, according to a tweet by Charlie Spiering, a White House correspondent for Breitbart News. A White House official confirmed the comment.

CLICK HERE to read the entire Bloomberg Politics article

srlp.jpg


Statement from NAHB Chairman Granger MacDonald on Canada Seeking Alternative Source of Lumber Exports to the U.S.


Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville Texas, today issued the following statement regarding reports that Canada is looking at China to boost lumber exports as an alternative to the U.S.:

“The fact that Canada is seeking alternative sources to the U.S. for its lumber exports should serve as a wake-up call to Washington policymakers. More than one-third of the lumber used in the U.S. last year came from exports because the U.S. does not produce enough lumber to meet the nation’s needs. Home builders need a consistent, reasonably priced supply of lumber to keep housing affordable for hard-working American families.

“Policymakers have a number of options at their disposal to make up for the current domestic shortfall. These include increasing domestic harvests, boosting exports from other nations and limiting U.S. exports. Moreover, it would be in the best interests of the U.S. and Canada to achieve a long-term solution to the ongoing trade dispute that ensures U.S. lumber consumers have access to a stable supply of lumber at competitive prices.”

3 comments:

Modmentor said...

This has happened before to the building industry. Its a shame that we are forced to raise our prices to compensate for this artificial increase at a time when the industry is just starting to recover. We are back to the days when builders have to have a provisions in their contracts to compensate for this CVD. Prices have been rising since January in anticipation of this CVD and I expect they will go higher as the full effect of the tax is felt by the marketplace. Its my hope that lumber buyers do not panic, like the last time this happened and drive the prices of these commodities thru the roof. Modular builders can look forward to the return of the " Lumber Surcharge on their estimates and invoices.
In my opinion, this problem is not with the Canadians but with the domestic producers and our government. In Canada, they subsidize producers to "stump" what they cut and plant new trees in place of the ones removed. We do not do that here. Maybe the solution is to look at what Canada does and develop a program like theirs to renew our timber lands for the future and make us competitive with our neighbors to the north.
Now that world demand is not as high as it was and our domestic producers are no longer sending the bulk of their production out of the country, they wake up and bring this to the Commerce Department again? Its a shame
It is going to be interesting to see how the Modular Industry reacts to the CVD..........

Anonymous said...

Isn't the Canadian SPF situation actually holding the US hostage much like oil imports do? And the age old remedy to that has always been to produce more US based energy products so we can cut our dependence on foreign imports? We can increase our tree growth and cut from federal lands. Anytime any product from another nation holds us hostage, we need to explore how we can fill that void domestically.

Modmentor said...

In my previous comment I had believed that the decision by the Commerce Deportment was based on the age old Stumping fees paid by the Canadian government, but I must admit I was wrong. This dispute is an decade old one based on dumping into the the US, which means unfairly low prices relative to the market. Five Canadian companies were investigated and it turns out that all five had been pricing in this way. The CVD at 19.88 percent was based on the average of these companies.
To respond to the previous comment by Anonymous, I think that we as a country to establish a policy that encourages and supports the renewal of all forest lands that we harvest and make us more competitive.