As construction material price are rising, the US Commerce Department took action that will contribute to an additional rise in the prices of a key building material.
The tariff was announced in response to a petition from American lumber producers, who complained that Canada’s system of “stumpage” (charges for logging on Canada’s government-owned lands) amounts to an unfair subsidy. The industry has failed to prove there is an unfair advantage. However, American lumber producers continue to complain about Canadian practices.
“Ninety percent of the trees in Canada are owned by the Canadian Government and they sell those trees to Canadian companies at artificially low prices,” said Steve Swanson, former U.S. Lumber Coalition Chairman. “It may raise the price modestly, but these increases can be absorbed.”
Home builders, however, believe the new tariffs will impact their costs. The National Association of Home Builders (NAHB) today denounced the decision by the Department of Commerce to impose the 20 percent 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 US Department of Commerce that will ultimately do nothing to resolve issues causing the US-Canadian lumber trade dispute but will negatively harm American consumers and housing affordability,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.
Thirty-three percent of the lumber used in the US last year was imported. The bulk of the imported lumber – more than 95 percent – 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.