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Timber tariffs not the way to go, say U.S. home builders

Softwood lumber duties will add to American home construction costs
N-Bay home construct 1

A 20 per cent U.S. duty imposed on Canadian lumber exports will harm American home buyers, consumers and businesses, said the Washington-based National Association of Home Builders (NAHB).

“NAHB is deeply disappointed in this short-sighted action by the U.S. Department of Commerce that will ultimately do nothing to resolve issues causing the U.S.-Canadian lumber trade dispute but will negatively harm American consumers and housing affordability,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas, in a statement.

Thirty-three percent of the lumber used in the U.S. last year was imported. The bulk of the imported lumber – more than 95 percent – came from Canada, the group contends.

“This means that imports are essential for the construction of affordable new homes and to make improvements on existing homes,” said MacDonald.

In late April, the U.S. Commerce Department announced preliminary countervailing duties averaging 19.88 per cent on most Canadian softwood lumber producers after intense lobbying by the U.S. Lumber Coalition following the expiration of 2006 softwood lumber agreement.

NAHB recommends that Canada and the U.S. work to achieve a long-term lumber trade solution that provides for a fairly priced supply, reduce U.S. lumber exports, and open up federal forest lands for logging in an environmentally sustainable manner.

“Taking these steps to meet our nation’s lumber needs is essential because tariffs needlessly increase the volatility of the lumber markets, resulting in higher prices for U.S. home buyers and other consumers and businesses that use lumber,” said MacDonald.

The association said uncertainty over the lumber trade deal has increased the price of a new home by almost US$3,600 since the first quarter of this year.

The NAHB reported on April 25 that sales of new single-family homes rose for the third straight month, increasing 5.8 percent in March, according to data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

“The March sales numbers are the second highest on record since the Great Recession, which is especially encouraging considering the poor weather conditions throughout many parts of the country,” said NAHB Chief Economist Robert Dietz. “With tight existing home inventory, rising household formations and continued job creation, we can expect further growth in new home sales moving forward.”