Good and Bad News on Lumber Production and Tariffs
This post has been updated.
Recent developments on the lumber front indicate that increased logging from federal lands and higher tariffs are in the offing later this year.
Meanwhile, developments continue at a rapid pace on the overall tariff front. President Trump on April 9 announced a 90-day pause on the reciprocal global tariffs that he called for on April 2.
The pause drops his country-specific tariffs down to a 10% rate for all trade partners except China. The president raised tariffs on Chinese goods to 145%.
Opportunities for Increased Domestic Lumber Production
In a move that NAHB has encouraged, President Trump signed an executive order that calls for a 25% increase in timber production from federal lands. NAHB has taken a leading role in urging the administration and Congress to increase the domestic supply of timber from federally owned lands in an environmentally responsible manner.
Acting on the president’s directive, U.S. Secretary of Agriculture Brooke Rollins issued a memo directing the U.S. Forest Service to:
- Increase timber outputs,
- Simplify permitting,
- Remove National Environmental Policy Act processes,
- Reduce implementation and contracting burdens, and
- Work directly with states, local government, and forest product producers to ensure that the Forest Service delivers a reliable and consistent supply of timber.
The U.S. does not currently produce enough lumber to meet domestic demand (the U.S. uses 50 billion board feet annually but only produces 35 billion board feet). This new development will help the nation move in the direction of self-sufficiency. However, due to logistical issues and the long time to ramp up sawmill production, it is projected to take months, if not years, before the market feels any impact from this action.
Higher Canadian Lumber Tariffs Announced Later This Year
Offsetting the good news to expand domestic timber output is the fact that tariffs on Canadian lumber shipments into the U.S. are expected to more than double by September.
Current countervailing (anti-subsidy) and anti-dumping duties on Canadian lumber stand at 14.5%, but the Commerce Department conducts annual reviews on these rates and has released a preliminary determination to more than double this levy to 34.5%. The official determination should be released in the Federal Register this week, and a final review will be published in August or September. The higher rates will take effect then.
The countervailing and anti-dumping duties on Canadian lumber stem from a trade dispute with our northern neighbor that has been ongoing for decades. These duties are completely separate from the global reciprocal tariffs announced by President Trump last week. When the president made his announcement, NAHB scored an important win when Trump chose to continue current exemptions for Canadian and Mexican products, including a specific exemption for lumber from any new tariffs at this time.
How NAHB Continues to Combat Lumber Tariffs
It’s clear we are not out of the woods yet on the possibility that Canadian lumber tariffs could run even higher than 34.5% later this year. The White House issued an executive order in March commanding the Commerce Department to investigate the national security impacts of imports of timber and lumber.
NAHB filed a comment letter on March 31 with the Department of Commerce to argue that housing is a critical component of national security and that no further lumber tariffs should be imposed in the name of national security.
The worst outcome from the investigation is that the U.S. imposes an additional tariff on top of this 34% duty tentatively slated to go into effect this fall.
For now, Canadian lumber tariffs stand at 14.5%, but members should be forewarned to expect higher tariffs later this year and plan accordingly.
NAHB will continue to urge the White House to roll back tariffs on lumber and other building materials and remains focused on improving building material supply chains and easing costs for our members.