U.S. Must Resume Negotiations with Canada on Lumber Trade Deal
American home builders need access to reasonably priced lumber to build homes that average working families can afford. However, U.S. domestic production is not sufficient to meet demand.
To help fill the gap in demand, the United States and Canada are long-standing trade partners in softwood lumber. Yet despite U.S. reliance on Canada to fully satisfy our lumber demand, there is currently no trade agreement in place and, while the United States reduced tariffs on Canadian softwood lumber imports to around 9% in December 2020, tariffs still add to the overall cost for home builders.
Why It Matters
The tariffs on Canadian softwood lumber are acting as a tax on American home builders and home buyers, making housing less affordable for American families and forcing builders to look overseas to other markets, including Sweden, Germany, Brazil and Austria in order to meet demand.
These tariffs on Canadian imports are particularly acute when lumber prices overall are high, which they have been for several months, beginning in 2020. That is why it is imperative that the Biden administration focus its efforts on working with Canada to develop a long-term solution to the trade dispute that will ensure American home builders and consumers have access to a reliable supply of softwood lumber at competitive prices.
Any long-term solution should necessarily include a U.S.-Canada settlement regarding the current anti-dumping duties and countervailing duty cases and the overall legal challenges associated with the current softwood lumber dispute.
America cannot meet the nation’s demand for softwood lumber, therefore, NAHB believes the following steps should be taken:
- Negotiate a long-term settlement with Canada to address American home builder concerns regarding price and availability of lumber. NAHB will focus its efforts on meeting with representatives of the Biden administration and Congress, as well as Canadian federal and provincial officials, to achieve this goal.
- Boost domestic production by seeking higher targets for timber sales from publicly-owned lands and opening up additional federal forest lands for logging in an environmentally sustainable manner.
- Reduce U.S. lumber exports. Domestic producers are selling abroad to China and other international clients in order to increase profits. Lumber used in residential construction should remain in the United States while there is a gaping need at home.
- Seek out new markets to reduce our nation’s reliance on Canadian lumber imports and make up for our domestic shortfall. Actions should include identifying potential markets and working with countries already exporting softwood lumber to the United States to increase their exports here.