An under-fire industry crucial to homebuilding could be about to take a further hit
British Columbia’s forestry sector is preparing for the results of a US investigation that could raise tariffs on wood imports, intensifying pressure on an industry already grappling with high duties and mill closures.
The probe stems from US president Donald Trump’s decision earlier this year to launch a Section 232 investigation into whether imported timber, lumber, and related products pose a national security threat. Section 232 of the Trade Expansion Act of 1962 allows the US Commerce Department to recommend action within 270 days if imports are deemed harmful.
Further tariffs could have a big negative impact on a sector that’s crucial to Canadian and US homebuilding, potentially driving up construction costs even further as tariff tensions between the two countries continue.
Canada’s homebuilding crisis may already be even worse than it seems, Canadian Home Builders’ Association (CHBA) chief executive officer Kevin Lee told Canadian Mortgage Professional last week, with housing starts essentially skewed by construction of purpose-built rental accommodation.
Russ Taylor, a forestry industry consultant and analyst, told CBC News that it was unclear what measures might be introduced as a result of the probe.
He described the US’s approach as one that puts a “chokehold” on Canada, with little clarity on whether plywood, OSB and pulp would face a lower or higher tariff than lumber imports.
The US Department of Commerce already increased countervailing duties on Canadian softwood lumber in August, more than doubling the rate from 6.74% to 14.63%. Combined with a 20.6% anti-dumping duty, Canadian lumber now faces a tariff rate of 35.2%, according to the National Association of Home Builders (NAHB).
NAHB data show lumber prices in the US remain volatile, with the framing lumber composite down 3.7% in the week ending Aug. 22. While prices are 5.8% higher than a year earlier, builders continue to face elevated costs, which are often passed on to homebuyers.
Meanwhile, there’s no end in sight to trade tensions between Canada and the US that have rumbled on since the beginning of President Trump’s second presidency. Canadian prime minister Mark Carney removed many counter-tariffs on US imports last week in a bid to kickstart trade negotiations, but while talks are reportedly continuing, there’s been no indication that a deal is imminent.
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