Construction Materials
Homebuilders' Group Wants Trump to Act to Halt Lumber Price Surge
With lumber prices rising sharply, the National Association of Home Builders wants the Trump administration to take steps to halt or reverse the costly trend.
In an Aug. 7 letter, NAHB called on President Trump to push U.S. lumber producers to boost production and also to work toward a new trade agreement with Canada to end current tariffs on lumber imports to the U.S. Those tariffs now are about 20%, according to U.S. and Canadian industry officials.
NAHB says lumber shortages have developed and prices have shot up by 80% since the middle of April, due partly to increased demand for housing construction and more interest from do-it-yourselfers seeking to make home improvements during the pandemic.
The U.S. Census Bureau reported on Aug. 18 that privately owned housing starts in July climbed 22.6% from the June level, to a seasonally adjusted annual rate of 1.496 million.
The July figure also was up 23.4% from the year-earlier level, reported the Census Bureau, which is part of the Commerce Dept.
In his letter to Trump, Gerald M. Howard, NAHB president and chief executive officer, asked the president to urge U.S. lumber companies to boost production, which should slow, if not reverse, the price increase.
Howard also said that reopening negotiations with Canada on a new lumber trade pact “would be a significant step forward.”
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According to U.S. Commerce Dept. figures, softwood lumber imports from Canada totaled $4.2 billion in 2019.
Contacting the Cabinet
NAHB’s letter to Trump followed recent, similar letters to other senior administration officials, in which the group pressed its case on lumber prices, including the call for renewed trade talks with Canada.
For example, in a July 24 letter to U.S. Trade Representative Robert Lighthizer, Howard said the lumber dispute between the U.S. and Canada “remains unresolved, leading to further disruptions in the consistent supply and availability of lumber for housing.”
He said current import duties on Canadian lumber “are aggravating already high lumber prices” and urged Lighthizer to join with Canada on "a workable and long-term solution to a trade dispute that has continued for more than 37 years.”
As for the Canadian industry, a spokesperson for the BC Lumber Trade Council told ENR in an email, "Finding a durable resolution to the softwood lumber dispute remains a key priority, but that will require the U.S. to come to the table."
In a July 27 letter to Commerce Secretary Wilbur Ross, NAHB’s Howard noted that the department on July 21 said it would extend the deadline for completing administrative reviews of tariffs on certain imports by 60 days, including lumber shipments from Canada. That extension would delay a decision on whether to lower tariff level until November.
Howard said NAHB had hoped that Commerce would act by September and “was expected to lower the duty levels to slightly more than 8%.”
He said, "NAHB and its members had hoped this would help ease some of the price constraints our members are currently facing, so we are extremely disappointed in this extensive delay.”
Dispute has long history
The dispute between the U.S. and Canada over the pricing of lumber shipments stretches back decades.
The two countries signed a six-year lumber trade pact in 2006, which was later extended into October 2015.
There was a further one-year standstill period, during which the two countries tried to work out a new agreement, but without success.
In 2017, after the Trump administration took office, the U.S. imposed tariffs of about 20% on Canadian lumber shipments.
Lumber wasn’t included in the U.S.-Mexico-Canada trade agreement, (USMCA), which went into effect on July 1 of this year.
Story updated on 8/18/2020 with Census Bureau/Commerce Dept. report on July housing starts.
