On Monday evening, U.S. President Donald Trump announced a new round of tariffs on Canadian lumber producers. If unpaid, these tariffs will go into effect on October 14. The new measures extend a 10 percent duty on imports of softwood lumber and timber. Further, there is a 25 percent tariff on kitchen cabinets, vanities, and other upholstered wood products. This decision is expected to raise lumber prices by at least 20%, worsening the housing affordability crisis for American families.
British Columbia Lumber Trade Council called the tariffs “misguided and unnecessary.” They warned of the harmful effects on Canadian and U.S. markets alike. They argue that these tariffs will “impose needless strain on the North American market,” particularly affecting Canadian producers who are already dealing with existing duties exceeding 35 percent from the U.S.
In a major step towards ending the lumber dispute, earlier this month Canada withdrew two of their legal challenges against U.S. duties on Canadian softwood lumber. Global Affairs Canada recently acknowledged that they chose to withdraw these challenges to pursue other paths towards resolution. Now this approach seems to have been overrun by the recently imposed value-added tariffs.
The consequences of these tariffs reach far beyond the lumber industry. The 25 percent tariff on kitchen cabinets and vanities, which includes both components and finished products. Beginning January 1, this rate could soar to 50 percent. A new pact among the participating countries needs to be finalized before then to avoid this spike.
The current trade war highlights a long-standing, complicated relationship between the U.S. and Canada over softwood lumber. These new tariffs would add dramatically to the cost of housing construction – or that’s the concern. Unfortunately, their cumulative impact is to price homeownership out of reach for millions of Americans.
