Lawmakers Echo NAHB Concerns on Rising Lumber Prices, Tariffs

Material Costs

During a House trade hearing on March 30, Rep. Kevin Hern (R-Okla.) echoed NAHB concerns that rising lumber prices are hurting housing affordability and the Biden administration needs to act swiftly to enter into negotiations with Canada on a new softwood lumber trade agreement.

In an exchange with U.S. Trade Representative Katherine Tai during a House Ways and Means Committee hearing on the Biden administration’s 2022 trade policy agenda, Kern cited NAHB data in stating that the “most recent (lumber price) spikes have added more than $18,500 to the price of an average new single-family home and nearly $8,000 to the price of a multifamily home. These volatile price increases are pricing families out of the American dream of owning a home and beginning to affect the economic practicality for investment in new projects.”

While questioning Ambassador Tai, Hern added that “this is obviously having an increasingly negative impact on housing affordability and we still don’t have a softwood lumber agreement with Canada. As best as we can tell, we aren’t even at the negotiating table on this and despite many assurances that both sides are eager to resolve this problem. Could you explain what the progress is and how we are going to resolve this critical issue?”

Ambassador Tai responded as follows: “Our dispute with Canada over softwood lumber and how they produce theirs has been one of these longstanding problems in our relationship and it goes to a fundamental incompatibility between our economic systems not unlike what we have with dairy. So this is an issue that is baked into our close and important relationship with Canada economically over time.”

Tai added that “it’s our view that our trade remedy laws are working as they should. Nevertheless, in recognizing the disruptions in the market, I frequently discuss softwood lumber issues with my Canadian counterpart. We as an administration are open to resolving our differences with Canada over softwood lumber. But that does require both of us to come to the table with a willingness to address the underlying difficulties in the compatibility of our systems. That door is always open, but it does takes two to tango.”

Rep. Steven Horsford (D-Nev.) also spoke about how soaring housing costs are hurting his constituents and the need to lower lumber tariffs to ease affordability woes. As part of the hearing, NAHB submitted a statement for the record which included the following:

“Resolving the long-running dispute with Canada over the trade in softwood lumber and addressing the steel and aluminum tariffs must be a top priority of Congress and the administration. Building affordable housing depends in large part upon a stable and affordable supply of building materials.

“Many parts of the country are mired in a housing affordability crisis. Protectionist trade policies that artificially increase the cost of key building materials exacerbate the problem while doing little to expand economic opportunity. Congress must work to ensure our trade policy agenda is both fair to domestic industry and considers the potential impacts on American consumers.”

View the exchange between Rep. Hern and Ambassador Tai.

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