Canadian duty equals rising lumber prices in Austin
Monday, May 1st, 2017
NAHB has denounced the decision by the U.S. Department of Commerce to impose a 20% countervailing duty on Canadian lumber imports, saying it will harm American home buyers, consumers and businesses while failing to resolve the underlying trade dispute between the two nations.
“NAHB is deeply disappointed in this short-sighted action by the U.S. Department of Commerce that will ultimately do nothing to resolve issues causing the U.S.-Canadian lumber trade dispute but will negatively harm American consumers and housing affordability,” said NAHB Chairman Granger MacDonald.
NAHB has been closing monitoring the situation regarding U.S.-Canadian lumber trade since the Softwood Lumber Agreement between the two nations expired on Oct. 12, 2015. There was a one-year cooling off period where neither country was allowed to engage in litigation on the issue that expired last October.
In the past year, we have kept our members up-to-date on association actions and events regarding the lumber trade dispute as noted in these past blog posts, many of which also ran in previous issues of the Monday Morning Briefing:
NAHB has also worked aggressively to get our message out to the media. Forty-eight hours after the Commerce Department announced the new lumber tariffs, The Hill and Fortune published editorials by NAHB Chairman Granger MacDonald condemning this short-sighted policy that will hurt American home builders, home buyers and lumber consumers.
Canadian Imports are Essential
Thirty-three percent of the lumber used in the U.S. last year was imported. The bulk of the imported lumber — more than 95% — came from Canada.
“This means that imports are essential for the construction of affordable new homes and to make improvements on existing homes,” said MacDonald.
The trade agreement that has governed Canadian imports of softwood lumber since 2006 effectively expired at the end of 2016. Uncertainty surrounding a new trade pact is the primary catalyst for the 22% spike in the Random Lengths Composite Price Index for lumber since the beginning of the year.
These price hikes have negative repercussions for millions of Americans. It takes about 15,000 board feet to build a typical single-family home and the lumber price increase in the first quarter of this year has added almost $3,600 to the price of a new home.
To truly put the interests of America first as it relates to this trade issue, NAHB believes the U.S. and Canada need to work cooperatively to achieve a long-term, stable solution in lumber trade. This is essential because tariffs needlessly increase the volatility of the lumber markets, resulting in higher prices for U.S. home buyers and other lumber consumers.
Since the U.S. does not produce enough lumber to meet the nation’s demand, NAHB remains committed to first and foremost, exhausting all domestic opportunities. This includes pursuing better multi-use forest management practices, reducing U.S. lumber exports overseas, and opening up additional federal forest lands for logging in an environmentally sustainable manner.
Further, U.S. trade negotiators need to recognize that in every previous countervailing lumber duty case brought against Canada, it was ultimately determined that that the Canadian government did not provide unfair subsidies to its lumber industry.
And it’s not just home buyers and everyday people who are hurt by tariffs. According to the Bureau of Labor Statistics, in 2016 housing and related industries that used softwood lumber employed nearly 4.5 million American workers and outnumbered U.S. lumber-producing workers by 31 to 1.
“Venturing once more down this broken protectionist path will only enrich the special interests of lumber mills and big landowners,” said MacDonald. “It’s time to consider our national interest and cut a fair deal for U.S. home buyers, consumers and businesses who use lumber.”
Article from NAHB website.
