Forest Products Industry

US builders already pay a premium for the spruce, pine and fir lumber that Canada’s British Columbia produces and could soon face additional tariffs after President Donald Trump’s proclamation that America doesn’t need the province’s wood. Source: Vancouver Sun They like it particularly for framing walls because Canadian spruce, pine and fir is lighter, stronger and tighter-grained than the southern yellow pine lumber that is common in America but has a reputation for warping. US builders also need it because American mills still don’t make enough lumber to fill US needs, despite Trump’s declaration that “we have more lumber than they do.” “There’s just this gap between what the US can supply and what their demand is,” said Kurt Niquidet, president of the BC Lumber Trade Council, the main trade group that represents the BC industry’s interests in the U.S.-Canada tariff dispute. Since 2017, BC’ s lumber producers have faced countervailing and anti-dumping duties on US shipments. Over the last year those have ranged from 11.5% to 16.6% on Can$3.5 billion of BC lumber exports. Companies are now bracing for Trump’s on-again-off-again threats of an additional 25% tariff on exports on all Canadian goods to stick as of 2 April 2025. The US National Association of Home Builders estimated that tariffs on all materials would increase the cost on new homes to US$9,200 a unit. “It’s frustrating, but I think the facts of the matter point to something different,” Mr Niquidet said. The US housing market consumes a massive amount of lumber, some 50 billion board feet in 2024, but its lumber producers could only supply some 35 billion board feet, according to long-time industry consultant Russ Taylor. “There’s no way American supply, in the short-term, can do anything but rely on Canadian lumber,” Mr Taylor said. As of 2024, Canada made up about 12 billion board feet, or 24% of the US market. BC makes up more than half of that. The US gets another 6% of its lumber from overseas, mainly from Europe. “Tariffs are just going to push the price up and create shortages,” Mr Taylor said, adding that it will likely result in “market chaos” for such things as oriented-strand-board panels, pulp and newsprint. Spruce, pine and fir lumber isn’t exclusive to Canada, but it’s what mills in Canada’s boreal forests produce and is “a differentiated product” in the housing market, according to Mr Niquidet. “People like it for framing homes and so on,” Mr Niquidet said. “They like that it’s strong and it doesn’t warp and twist, so it’s got a good reputation with homebuilders.” For those reasons, Mr Niquidet said there will likely still be demand for Canadian lumber even if the US was able to expand its own lumber production as Trump has said he wants to. “What’s happening in the market right now, there’s actually a large premium on SPF over southern yellow pine,” Mr Niquidet said. Mr Niquidet said that, recently, US buyers were paying US$547 for 1,000 board feet of spruce, pine and fir two-by-fours, compared with just over US$400 for southern yellow pine two-by-fours. Mr Trump, on 1 March, signed an executive order aimed at the “immediate expansion of American timber production,” intended to pare back what are characterized as “heavy-handed federal policies” restricting the availability of timber on U.S. federal lands for lumber production. Mr Trump, in his order, stated the US “has an abundance of timber resources that are more than adequate to meet our domestic timber production needs.” But tapping that wouldn’t be a short-term project, according to Mr Taylor. Lumber producers would have to build the infrastructure needed: roads, bridges and transportation nodes to start logging, with big questions over where the labour to do so is going to come from, Mr Taylor said. New sawmills, he added, are major capital investments that cost roughly US$300 million to construct, and “who’d be going to build a mill not knowing what the rules of the game are? Are tariffs on or off, for how long?” Tariff threats are hitting the BC industry at the same time that it’s suffering through rounds of mill closures, consolidations and reduced production. BC’s exports to the US in 2024, 10.4 million cubic metres of lumber, were down 1% from 2023 and 42% from the industry’s last peak in production in 2016 when the province exported 17.9 million cubic metres of lumber. The province’s biggest lumber companies such as Canfor, West Fraser Timber Co, and Tolko, have already made major investments in the US South. “If we do see the 25% go ahead on 2 April, that would push us up to 39% combined tariffs,” Mr Niquidet said. “So, we expect the affects both sides of the border.” Mr Niquidet said Canadian producers would be able to pass on some of the increased cost to its buyers, but we’ll likely see some of BC’s higher-cost mills cut back on production, or even close. BC’s industry is also bracing for an increase in tariffs under the existing softwood lumber dispute. In February, the US Department of Commerce made a preliminary recalculation of those duties that would increase them to 34%, from 10%. So, those duties, combined with Trump’s tariffs, would raise the export bill to 55%.