Recently, tariffs of up to 24% have been added on to Canadian wood shipped into the United States.
5 Canadian companies were specifically named in the tariff ruling, but the tariffs are for all Canadian exports of softwood lumber to the United States. Last year, that export was more than $5.6 billion.
Decades in the making
It turns out this tiff with our neighbors to the north isn’t new. American lumber companies began back in the 1980s to complain that Canadian companies were unfairly subsidized by their government, giving them a financial advantage. In 2002, the United states imposed a stiff 30% tariff on Canadian softwood lumber.
Canada claims this action resulted in job losses for 30,000 people.
The World Trade Organization was asked to decide on the fairness of the tariff. It concluded that Canada was not unfairly subsidizing its lumber companies, and it ordered the United States to reach an agreement ending the tariffs. That agreement was reached in 2004, but it expired in October of 2016.
Meanwhile, Canada has long taxed certain imported American dairy products. Some of these Canadian tariffs are up to nearly 300%. The dairy tariffs were also grandfathered into the NAFTA trade agreement.
The tariffs on US-produced dairy products will remain for as long as the country continues to take part in the NAFTA trade deal. While some believe it’s unfair to link lumber to dairy, members of American lumber trade groups see this as a necessary way to compete against what they believe are subsidized Canadian lumber products.
Through the summer
The home building and home remodeling industries knew this was coming. Other trade deals with South and Central American countries are being negotiated to compensate for the increase in this wood.
The current lumber supply in the United States should last through the summer months. Prices would start to be seen this fall if the if the tariff moves forward on Canadian softwood lumber.
Are you thinking of an exterior remodeling project? These new tariffs may likely increase the cost. The tariffs will hit softwood lumber, which is used for framing. It’s essential for new homebuilding and exterior remodeling.
Let’s beat those upcoming price increases. Talk to us today about transforming your home’s exterior.
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