US Commerce Department Cuts Tariffs on Canadian Lumber
The decision comes as trade officials look to normalize the price of lumber in the United States and provide relief to the home building industry.
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In early December the U.S. Commerce Department reduced tariffs on Canadian lumber coming into the United States by more than half, from 20 percent to nine percent. This decision came late in a year that featured massive volatility in lumber prices in the U.S., slowing an otherwise booming period for the homebuilding industry.
The reduction is good news for home builders who have been struggling with skyrocketing lumber prices, making construction more expensive and homes less affordable.
“The Commerce Department’s action to reduce duties from more than 20 percent to nine percent on softwood lumber shipments from Canada into the U.S. is a positive development, but more needs to be done,” said Chuck Fowke, chairman of the National Association of Home Builders. “Tariffs have contributed to unprecedented price volatility in the lumber market in 2020, leading to upward pressure on prices and harming housing affordability for American consumers.”
Stability will be essential for the home building industry following a year where lumber prices in July climbed above $500 per thousand board feet for the first time since 2018, and peaked at a historically high price of $950 per thousand board feet in mid-September. Lumber prices have since dropped from that peak but remain 60 percent higher than they were in April.
According to the NAHB, lower tariffs would eliminate some of the uncertainty that has disrupted the marketplace and slowed the upward climb of lumber prices.
“The U.S. needs to work with Canada to end the tariffs and achieve a long-term, stable solution in lumber trade that provides for a consistent and fairly priced supply of lumber,” Fowke said.