Why larger tariffs on Canadian lumber is probably not sufficient to stimulate long-term investments in US forestry

Lumber, particularly softwood lumber like pine and spruce, is essential to U.S. dwelling development. Its availability and worth immediately have an effect on housing costs and broader economic activity in the building sector. The U.S. imports about 40% of the softwood lumber the nation uses each year, more than 80% of that from Canada.

President Donald Trump says that the U.S. has the capability to fulfill 95% of softwood lumber demand and directed federal officers to replace insurance policies and regulatory tips to expand domestic timber harvesting and curb the arrival of foreign lumber.

On Sept. 29, 2025, he introduced new tariffs on imported timber and wooden merchandise, together with an extra 10% tariff on Canadian lumber. Those have been added to 35% tariffs imposed on Canadian lumber in August. It was the newest section in a long-standing dispute over the provision of lumber to builders within the U.S., which dates again to the Eighties, when U.S. producers started arguing that Canadian corporations have been benefiting from unfair subsidies from their authorities. Starting on Oct. 15, Canadian softwood lumber imports might face tariffs exceeding 45%.

As researchers learning the forestry sector and international trade, we acknowledge that the U.S. has ample forest sources. But changing imports with home lumber isn’t so simple as it sounds.

There are variations in tree species and high quality, and U.S. lumber typically comes at a better price, even with tariffs on imports. Challenges like restricted labor and manufacturing capability require long-term investments, which non permanent tariffs and unsure commerce insurance policies typically fail to encourage. In addition, the quantity of lumber imported tends to reflect the boom-and-bust cycles of housing development, a dynamic that tariffs alone are unlikely to vary.

Trump’s strikes

To increase U.S. logging, in March, Trump issued an govt order telling the departments of Interior and Agriculture to ease what he referred to as “heavy-handed” laws on timber harvesting. The govt order and a follow-up memo from Agriculture Secretary Brooke Rollins don’t spell out specifics, however officers say extra particulars are within the works that can simplify the timber harvesting course of, with the purpose of boosting domestic timber production by 25%.

That identical month, Trump ordered the Commerce Department to evaluate how imports of timber, lumber and associated wooden merchandise have an effect on U.S. national security.

While that evaluation was underway, in July, the Commerce Department revealed findings from a trade review of 2023 Canadian lumber imports. That inquiry alleged that Canadian corporations have been promoting lumber to the U.S. at unfairly low prices, doubtlessly leaving U.S. producers with decrease gross sales or depressed costs. That discovering was cited as the premise for the 35% August tariff announcement.

In its nationwide safety investigation initiated in March, the Commerce Department concluded that an overreliance on imported wooden merchandise means “the United States may be unable to meet demands for wooden merchandise which are essential to the nationwide protection and significant roads.” The September tariff announcement relies on these findings.

Canadian lumber within the US market

In 1991, the U.S. imported 11.5 billion board feet (27 million cubic meters) of Canadian lumber. Those imports rose to a excessive of twenty-two billion board toes (52 million cubic meters) by 2005.

But as housing development declined – particularly throughout the Great Recession from 2007 to 2009 – imports dropped sharply, to lower than 8.4 billion board toes (20 million cubic meters) in 2009. The present quantity has not recovered to prerecession ranges, rising solely to 12 billion board toes (28 million cubic meters) in 2024.

The worth of Canadian lumber has additionally fluctuated. Historically, costs for Canadian lumber have averaged about US$330 per thousand board feet ($140 per cubic meter). During and after the COVID-19 pandemic, import prices soared to virtually $800 per thousand board toes ($340 per cubic meter). But since peaking in 2021 and 2022, costs have dropped considerably to $436 per thousand board toes ($185 per cubic meter) by 2024.

In whole, in 2024, the U.S. imported more than $11 billion in forest and wood products from Canada. Softwood lumber accounted for nearly half of that.

Lumber and housing

As private earnings rises and populations develop, individuals search to construct new properties. As new dwelling development – referred to as “housing starts” in financial information – will increase, so does demand for softwood lumber to construct these properties. And when housing begins gradual, so does lumber demand.

For occasion, housing begins fell throughout the Great Recession. They declined from a January 2006 peak of two.3 million to lower than 500,000 in January 2009 – a decrease of nearly 80%. In that very same interval, imports of Canadian lumber fell by more than 60%. Domestic softwood lumber manufacturing fell by more than 40%.

Both home and imported lumber costs can immediately affect the general price of constructing properties, which in flip affects housing affordability. That stated, lumber used for framing normally accounts for less than 10% of the total cost to build a new home. The results of tariffs on new dwelling development could also be considerably lower than different elements, corresponding to rising labor costs.

A matter of alternative

The U.S. has loads of potential lumber out there. Especially within the South, the inventory of harvestable lumber has grown significantly over a few years.

However, the forms of wooden out there within the U.S. will not be at all times the identical as what’s out there from Canadian imports. For framing, contractors could desire spruce, northern pines and fir, naturally ample in Canada, as a result of they’re lighter and less likely to warp than southern yellow pine, which is ample within the southern U.S. Southern yellow pine is extra generally used to make utility poles and preservative-treated lumber for outside development tasks, corresponding to decks.

Lumber from Idaho, jap Oregon and jap Washington, nevertheless, does share traits with Canadian species and will take the place of at the least some Canadian lumber.

As the Trump administration seeks to spice up home lumber, consumers will probably be wanting not solely at the place their lumber got here from, however what it prices and what sort of lumber is greatest for what they should accomplish.