Fox Business Kelly Saberi reports on how Canadian tariffs affect the supply and production of U.S. timber.
president Donald Trump's Tariffs are causing rise in timber prices, warning home builders that will increase construction costs and lead to more expensive homes for US consumers.
Wood prices reached their highest levels this week in two and a half years, with timber futures rising more than 14% as of Wednesday amid concerns over tariffs. The developments come after Trump signed an executive order earlier this week and launched a national security investigation into the vulnerability of “imported wood, timber and their derivative products being dumped into the US market.”
The investigation could result in higher damping duties due to Canadian timber being imposed later this year. This pushed Canadian wood to almost 40%, along with a 14.5% anti-dumping and supply prevention duties on Canadian coniferous wood that was in effect before Trump returned to the White House in January, as well as a 25% tariff on Canadian imports that took effect on March 4th.
Trump has also issued an executive order to expand logging in the country, but Canada's higher tariffs (the dominant source of U.S. timber imports) have sparked concerns among home builders about the higher material costs that affect the affordability of American homes.
Trump is executive order to address timber production, national security concerns
Home builders warn President Trump's tariffs on Canadian wood will increase costs for home buyers. (Angus Mordant/Bloomberg via Getty Images)
The National Association of Home Builders (NAHB) noted that the US imported roughly $8.5 billion in sawmills and timber products in 2023, with almost 70% (or $5.8 billion) of those imports coming from Canada.
NAHB Chairman Carl Harris has issued a statement on Trump's tariffs. “On President Trump's first day in office, he issued an executive order directing departments and agencies to provide emergency price relief by pursuing actions to reduce housing costs and increase housing supply.
“Taxes on timber and other building materials will increase construction costs, block new developments, and consumers will pay tariffs in the form of higher housing prices,” Harris explained, adding that the Trump administration should review tariffs, cost more homes and eliminate barriers that constrain production.
Prices for wood, construction materials may rise due to customs duties
Canada is the source of about 70% of U.S. wood imports, exposing the home construction industry to higher costs. (Mario Tama / Getty Images / Getty Images)
The Federal Reserve Beige Book – A regular report examining the current economic situation nationwide through the Fed's 12 regional districts and national summary, published Wednesday, including comments highlighting concerns from businesses regarding increased timber costs due to tariffs.
“Construction activities have been reduced conservatively in both residential and non-resident units. Some contacts in the sector also expressed tensions about the potential tariff impact on the prices of materials and other materials,” the Fed's national summary states.
Trump's executive order to increase our timber production was welcomed as a victory by logging industry leaders
President Trump has issued an executive order aimed at expanding domestic timber production, but it is unclear how quickly it will affect supply. (Mario Tama / Getty Images / Getty Images)
Four of 12 regional banks, including Richmond, St. Louis, Kansas City and San Francisco, mentioned concerns over rising prices for materials and other building materials in February.
“Housing property construction contacts highlighted discussions on escalation clauses during negotiations over the last few weeks. The Kansas City Fed summary explained as builders and investors sought protection from the growth of expected material costs due to changes in trade policy.
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“Similarly, the lender reported that he paid more attention to the risks associated with potential increases in material costs during the underwriting process,” he added.
