The U.S. doesn’t produce enough lumber to meet domestic demand and thus imports about a third of the softwood used in home construction, mostly from Canada. Environmental policies restrict logging on public land in the American Northwest. Timber production has shifted to private land in the Southeast, but those forests must be managed so they aren’t overlogged.
American lumber companies say Canada unfairly subsidizes its producers by charging low royalties on timber harvested from government land. Mr. Trump responded in his first term by slapping tariffs on Canadian lumber, which Mr. Biden continued.
Lumber prices are up about 35% from five years ago, which has contributed to higher building costs. As the National Association of Home Builders notes, “the lumber tariffs act as a tax on American builders, home buyers and consumers.” Mr. Trump’s 25% across-the-board tariff would raise the current 14.54% tariff rate to nearly 40%.
Mr. Trump’s tariff threat has created uncertainty for lumber wholesalers and contractors that could delay rebuilding. The U.S. can’t ramp up lumber production in the near term to meet domestic demand, so contractors will have to eat the tariff cost on lumber from Canada or import more from other countries, which would be expensive.