Trump Tariffs Aren't to Blame for Higher Housing Costs, Says Lumber Coalition

But many market watchers, including the Federal Reserve, view the Trump tariffs as potentially inflationary.

SEATTLE (Scrap Monster): The US Lumber Coalition (USLC) is rejecting claims that tariffs on Canadian softwood lumber are driving up the cost of housing in the United States, calling them “unfounded scare tactics” aimed at undermining President Trump’s trade policy. 

Responding to reports that homebuilding costs could spike because of the continuing trade war, the coalition argued that the primary drivers of housing costs lie elsewhere. 

“Claims by the National Association of Homebuilders that import duties, or possible future tariffs, against unfairly traded Canadian lumber imports would drive the housing affordability issue routinely have been proven wrong,” said Zoltan van Heyningen, executive director of the US Lumber Coalition. 

 “An honest conversation about housing affordability, such as Prime Minister Carney engaged in when talking about housing affordability issues in Canada, would mainly focus on the cost of land, regulatory costs, labor, and high profitability rates of homebuilders.” 

Domestic gains cited from Trump trade policies 

US producers credit strong enforcement of trade laws with increasing domestic lumber capacity. 

 “President Trump’s America First trade policies, which include the unyielding enforcement of US trade laws against dumped and subsidized Canadian lumber imports, has resulted in a massive boost of US production of softwood lumber to build American homes with American lumber produced by American workers,” said Andrew Miller, chair and owner of Stimson Lumber Company. 

According to the coalition, since 2016 US mills have added 8.8 billion board feet of capacity and produced 30 billion additional board feet of softwood lumber—enough to build two million new single-family homes. 

“In order to continue seeing the massive growth of US softwood lumber production capacity that we have seen over the last nine years as a result of US trade law enforcement, it is essential that president Trump takes all necessary steps to downsizing Canada’s unsustainable 8 billion board feet of excess lumber capacity that is stifling continued US growth,” Miller noted. 

 Tariff costs and Canadian industry scrutiny 

Van Heyningen further stated, “Canadian softwood lumber companies, not US consumers, directly pay the import duties through their US subsidiaries. This is reflected in their financial statements and is not a cost that they can pass on to the consumers in today’s weak lumber market.” 

“To date, Canadian softwood lumber companies have paid an estimated 7 billion dollars to US taxpayers and will be on the hook for an additional estimated 1.3 billion dollars once the US Department of Commerce issues its latest results in the ongoing antidumping and anti-subsidy trade cases,” he added. 

 “Canada is desperately trying to avoid paying their bill to the US taxpayers and is pushing the outrageous scheme of using the collected duties slated for the US Treasury as a bailout of the Canadian industry to secure jobs for Canadian workers,” van Heyningen said. “They are suggesting relieving Canada from having to pay future duties while continuing to dump their excess lumber into the US market.” 

“This is an affront to the principles of US trade law enforcement, to US taxpayers, and to US industry and its workers who simply want to be able to compete on a level playing field,” he said. 

But many market watchers, including the Federal Reserve, view the Trump tariffs as potentially inflationary. The central bank has left interest rates on hold so far this year as it waits to see how the tariffs will impact the economy, and chair Jerome Powell has highlighted that prices could jump across the board from the trade war. 

 Courtesy: www.mpamag.com

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