Wed Nov 27 09:38:27 UTC 2024: ## Trump’s Proposed Tariffs on Canadian Goods Could Spike US Lumber Prices
**Washington D.C./Chicago –** President-elect Donald Trump’s threat to impose 25% tariffs on all goods from Canada and Mexico has sent shockwaves through the US lumber market, potentially driving up prices further. Lumber futures in Chicago jumped 2.1% Tuesday following the announcement, reaching $599 per 1,000 board feet.
The increase follows months of rising lumber prices attributed to decreased Canadian production. Canada is the largest foreign supplier of lumber to the US, and the proposed tariffs threaten to severely restrict supply. This comes at a critical time, as the US is facing increased demand for lumber due to rebuilding efforts following recent hurricanes, particularly Hurricane Helene which damaged 6% of Georgia’s forests, resulting in over $1.28 billion in losses.
Experts warn that the tariffs will exacerbate the nation’s housing affordability crisis. Kurt Niquidet, chief economist of the BC Council of Forest Industries, stated that such tariffs historically decrease supply and increase prices. Jim Tobin, president of the National Association of Home Builders, echoed this concern, noting that the tariffs will further inflate prices already expected to rise next year due to increased housing demand.
While the US has increased its domestic lumber production, it still relies heavily on imports from Canada. The combination of reduced Canadian supply due to existing duties and the potential for new tariffs, coupled with hurricane damage, creates a perfect storm for price increases. Although housing starts dropped in October due to hurricane damage, permits for single-family homes are at their highest level since April, suggesting a strong demand for lumber in the coming months. While the implementation of tariffs is less certain than the annual reassessment of existing duties, both scenarios would negatively impact Canadian lumber producers and significantly affect the US housing market.
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