U.S. lumber prices, which have already risen in recent months due to lower production in Canada, could see further gains following President-elect Donald Trump’s proposed tariffs on trade north of the border.
Lumber futures rose 2.1% to $599 per 1,000 board feet in Chicago on Tuesday after the president-elect posted on social media that he would impose a 25% tariff on all goods from Canada and Mexico unless those countries ban fentanyl and Do not curb the flow of migrants. In America. Shares of forestry companies including West Fraser Timber Co. and Interfor Corp. fell.
Canada, the largest supplier of lumber to the US, has faced many sawmill closures due to high US tariffs. Increasing tariffs would further threaten US lumber supplies as the country looks to rebuild in areas affected by the storm.
“What we’ve seen is that any of these types of fees or tariffs reduce supply and increase prices, and that impacts housing affordability,” said Kurt Niquidet, chief economist for the BC Council. Of forest industries.
Niquidate said the implementation of the tariffs is more uncertain than duties, which are reevaluated annually, but both would deal a financial blow to Canadian producers.
In the U.S., the tariffs “will further exacerbate our country’s ongoing housing affordability crisis,” Jim Tobin, president of the National Association of Home Builders, said in an emailed statement. He said the association already expected prices to rise next year as demand for housing increases.
While the US has become increasingly self-sufficient in its lumber production, it is still dependent on imports from Canada to meet domestic demand. And forests in the U.S. South, the continent’s largest timber production region, suffered damage during the recent hurricane season.
Hurricane Helene in September damaged about 6% of Georgia’s forests, equivalent to about 1.47 million acres, and caused $1.28 billion in damages, according to the Georgia Forestry Commission.
After Hurricanes Helene and Milton, housing construction declined in the South in October as builders postponed projects, although single-family permit authorizations – a sign of future construction – rose at the fastest pace since April.
Rebuilding efforts in hurricane-hit areas are “slowly gaining momentum” and should support strong lumber sales in late December and early next year, said Crystal Gauvin, a senior economist at Forest Economic Advisors.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
