B.C. group warns that softwood tariffs could lead to soaring U.S. rebuilding costs

An employee inspects finished wood products before shipping, inside the sawmill at Gorman Bros. Lumber Ltd. in West Kelowna, B.

C., on April 7. Matt Mills McKnight/Reuters The BC Lumber Trade Council is warning that threatened U.



S. tariffs stacked on top of duties against Canadian softwood could lead to soaring costs for residential construction, including in American states seeking to rebuild after natural disasters. Hurricane Helene damaged or destroyed an estimated 73,000 homes in North Carolina last fall, and wildfires burned more than 15,000 structures in California in January, the B.

C. council said in a submission this month to the U.S.

Department of Commerce. “Significant hurricane reconstruction efforts are also underway in Florida, Georgia, South Carolina, Virginia and Tennessee,” the council’s 55-page filing says. The submission was a response to a March 1 executive order by U.

S. President Donald Trump that launched a new investigation into softwood lumber, which is global in scope but could hit imports from Canada hard. Mr.

Trump’s order, which also threatened new lumber tariffs, cited Section 232 of the Trade Expansion Act, allowing him to connect the softwood file with national security. The probe into softwood and other wood products is scheduled to be completed by the end of this year. The Commerce Department said earlier this month that it plans to more than double the combined anti-dumping and countervailing duties against most Canadian softwood producers to 34.

45 per cent. The preliminary plans for higher duty rates are set to take effect by September. “This situation will only worsen if the Department recommends additional tariffs and quota restrictions as a result of its Section 232 investigation,” the B.

C. council said. Earlier this month, the U.

S. National Association of Home Builders estimated extra construction costs of US$9,200, including lumber, if new tariffs on various building materials are implemented. The NAHB has said lumber supplies alone cost nearly US$17,000 in the construction of a new American single-family house in April, 2020, and those costs temporarily tripled when softwood prices hit record highs in 2021.

The U.S. Lumber Coalition counters that the impact on consumers has been vastly exaggerated, arguing that softwood supplies account for a tiny portion of the total costs for a new house, including land value.

“While, in general, lumber is a small share of a house’s cost, lumber has made an even smaller contribution to the increase in house prices that has occurred in recent years,” coalition executive director Zoltan van Heyningen said in a filing this month to Commerce Secretary Howard Lutnick. The coalition disagreed with the NAHB’s math, saying typical lumber costs have risen by only US$1,051 for an American house in the past decade. “To the extent that building costs drive house prices, several factors play a much more important role than softwood lumber prices.

Namely, labour costs and the profits of the home builder,” Mr. van Heyningen said. “In terms of the total cost of ownership to the home buyer, the critical factor is mortgage rates.

” Benchmark lumber prices have tumbled by two-thirds since reaching record highs four years ago. Mr. Trump also has signed a separate executive order designed to spur lumber production within the United States.

The U.S. Lumber Coalition’s filing recommended that the White House take action to protect economic and national security.

“It is critical for the Trump administration to put in place Section 232 tariffs of an appropriate magnitude and for a sufficient duration on softwood lumber products imported into the United States from around the world,” Mr. van Heyningen said. But the BC Lumber Trade Council urged the Commerce Department to steer clear of new tariffs: “Any imposition of additional tariffs or quotas on top of the existing anti-dumping and countervailing duties on imports of softwood lumber from Canada would be counterproductive in relation to the goal of maintaining a secure and affordable supply of softwood lumber.

”.