Trump lumber tariffs lead to trade group spat

A lumber trade group is taking issue with the National Association of Home Builders’ stance against President Trump’s proposed tariffs on Canadian wood products. 

Following comments made on Fox Business earlier this week by NAHB CEO Jim Tobin, the U.S. Lumber Coalition called out the homebuilders’ association, which has publicly spoken out against several of President Trump’s proposed import taxes this year. The coalition alleged NAHB’s views were against the interests of American businesses and consumers. 

“NAHB continues to advocate for the importation of injurious unfairly traded Canadian lumber while paying lip service to the idea of fair and balanced trade,” claimed USLC Chair Andrew Miller, in a press release. Miller is also owner of Stimson Lumber Co., based in Portland, Oregon.

Labeling NAHB a Canadian ally, Stimson accused the trade group of advocating against the president’s goal of expanding U.S. lumber production and capacity. USLC also called the homebuilders group’s assertions of higher housing prices resulting from tariffs “a distraction tactic to avoid having an honest conversation about the origins of U.S. housing affordability problems,” pointing to record profits at some companies. 

Earlier this year, NAHB calculated that the full weight of all of Trump’s tariff proposals — if implemented — could increase the average cost of a home by $10,900. Real estate researchers at Cotality similarly warned of construction costs rising by as much as 10% this year due to tariff hikes. 

In their first-quarter earnings calls, some of the largest publicly held homebuilders also advised that customers should expect prices to go up on new homes in the second half of this year.  

“NAHB’s own data shows that the cost of softwood lumber in a new home amounts to less than 2% of the total cost of that house, and the cost of any duties levied against Canadian companies is virtually zero to the U.S. consumer,” countered the lumber coalition’s executive director, Zoltan van Heyningen. 

“NAHB and Canada should stop trying to scare the public about the strong trade law enforcement that has in fact been essential to stabilizing and growing the domestic supply of softwood lumber,” van Heyningen continued. 

The effect of previous U.S. trade policy helped contribute to increased domestic lumber production, with softwood production capacity up by approximately 9 billion board feet since 2016, USLC said in its release. Total lumber board feet increased by 30 billion over the same time period, as Canadian imports declined. 

Research analysts have also pointed out that ramped up U.S. production took place around  the same time homebuilders began sourcing more lumber domestically during the Covid-19 pandemic. Severe disruption to global supply chains early this decade led to shortages and price volatility on many building products, leading to less reliance on imports for some builders. 

NAHB responds to the U.S. Lumber Coalition

In response to the U.S. Lumber Coalition’s remarks, NAHB noted that the current elevated levels of domestic production still fails to meet housing market needs and took issue with USLC’s numbers. 

“Last year, Canada accounted for roughly 25% of U.S. lumber consumption because the U.S. does not currently produce enough lumber to meet domestic demand,” NAHB Chair and Lexington, North Carolina-based builder Buddy Hughes said. 

“NAHB has long championed the need to increase the domestic supply of timber from federally owned lands in an environmentally responsible manner to move the nation in the direction of self-sufficiency and to meet the needs of American homebuilders, homebuyers and homeowners,” Hughes continued in a statement sent to National Mortgage News. 

The trade group also pointed to Fastmarkets data that showed softwood lumber accounting for close to 7% of a median new home price of $407,200. 

While U.S. production has increased over the past decade, NAHB asserted “U.S. lumber production has been relatively flat since 2020, which is why we are seeing even more imports from other countries such as Germany and Sweden.”

A brief history of Trump’s lumber tariffs

Current tariff levels on Canadian softwood lumber stand at 14.54% and have ranged between 6.6% and 26.5% since 2017. 

President Trump initially put forth a planned 25% tariff on all goods coming from neighboring Canada and Mexico, which would have been imposed on top of previously existing levels, potentially shooting the lumber import tax up to 39%. Following implementation of the policy in early March, Trump paused enforcement within days. 

When new reciprocal tariff policies were introduced, then also suspended, on all countries in early April, Trump also exempted Canadian lumber goods from new tax hikes at that time.

With increases eliminated in the short term, lumber futures plunged in the days immediately following the Canadian  exemption. From a close of $662.00 on April 2, quotes tumbled as low as $571.00 the following week, later descending to $538.50 in early May. Prices sat at $606.00 at the close of trading on June 6. 

Revisions to existing softwood lumber import taxes are under review by the U.S. Commerce Department, with a new rate expected later this year. The department’s initial determinations are leading many business leaders to expect at least a doubling of the current 14.54% tax, which would require homebuilders to increase consumer prices of new homes, NAHB said.