New Study Shows Devastating Impact of Canadian Lumber Tariffs on Home Building

Two University of Tennessee professors report how higher duties on imported wood directly impact housing prices.

Contradicting the Trump administration that American lumber can replace imported wood from Canada, Andrew Muhammed, a professor of agriculture and resource economics, and Adam Taylor, professor of natural resources, wrote in their new study that this is not necessarily the case.

“We recognize that the US has ample forest resources, but replacing imports with domestic lumber isn’t as simple as it sounds. There are differences in tree species and quality and US lumber often comes at a higher cost, even with tariffs on imports. Challenges like limited labor and manufacturing capacity require long-term investments, which temporary tariffs and uncertain trade policies often fail to encourage.

“In addition, the amount of lumber imported tends to mirror the boom-and-bust cycles of housing construction, a dynamic that tariffs alone are unlikely to change.”

With the latest round of tariffs instituted by the Trump administration, duties are now as high as 45 percent and that may not include the latest 10 percent add-on instituted in response to a TV ad campaign by the province of Ontario using comments from former president Ronald Reagan to criticize tariffs as bad for both countries.

The two professors said not all lumber used in the building trade is the same and US wood cannot necessarily take the place of Canadian lumber.

“The US has a lot of potential lumber available. However, the types of wood available in the US are not always the same as what’s available from Canadian imports. For framing, contractors may prefer spruce, northern pines and fir, naturally abundant in Canada, because they are lighter and less likely to warp than southern yellow pine, which is abundant in the southern US. Southern yellow pine,” the report goes on to say, “is more commonly used to make utility poles and preservative-treated lumber for outdoor construction projects, such as decks.”

However some domestic wood could be used in place of Canadian imports, they said. “Lumber from Idaho, eastern Oregon and eastern Washington, however, does share characteristics with Canadian species and could take the place of at least some Canadian lumber.” Concluding on the complexities of the marketplace, the two professors wrote, “As the Trump administration seeks to boost domestic lumber, buyers will be looking not only at where their lumber came from, but what it costs and what type of lumber is best for what they need to accomplish.”

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