Tariffs garner range of reaction

While the U.S. Lumber Coalition celebrates, the NAHB critiques

Slapping tariffs on Canadian lumber has been described as an anti-consumer measure that could throw a dash of cold water on a slow-burning housing-market recovery.

They’ve also been described as the economic equivalent of a paper cut.

Who’s right? Ask 10 experts, and you might get 11 answers.

The National Association of Home Builders, whose interests often align with those of lumber dealers, is one of the sharpest critics of the plan to impose steep duties (averaging about 20%) on Canadian softwood lumber.

“The 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.-Canada lumber trade dispute but will negatively harm American consumers and housing affordability,” NAHB chairman Granger MacDonald said in a statement.

And the group sure has done its math: A tariff of 19.9% would lead to a 6.4% increase in U.S. home prices, or an average of $1,236 for a single-family home.

That’s a highly inflated figure, says the U.S. Lumber Coalition, which petitioned for the action. The group claims unfair competition from producers it says are subsidized by the Canadian government.

The tariffs, announced late Monday, will “begin the process of creating a level playing field for the future,” U.S. Lumber Coalition legal chair Cameron Krauss said in a prepared statement. Krauss is also SVP of legal affairs for Seneca Sawmill in Eugene, Ore.

Canadian producers have about 28% to 34% of the market in the U.S, according to the NLBMDA, which has made a renewal of the Softwood Lumber Agreement between the U.S. and Canada a legislative priority.

While the impact of the price of lumber on the housing market is in doubt, so is the impact of the tariffs on the price of lumber. Markets have been adjusting in recent weeks in anticipation of increased duties. One account put prices up 25% in the past eight weeks. Another pointed to increases of 30% to 40% over the same time a year ago.

In 2016, imports of softwood lumber from Canada were valued at an estimated $5.66 billion, according to Commerce Department figures.

Several distributors and retailers declined to comment on the issue.

One industry executive, who asked not to be identified, said that some lumber dealers might be too polite to say it, but higher prices of lumber could allow higher margins for the dealers.

“Time will tell whether [the tariffs are] good or bad,” said the executive. “But I think that people need to keep in mind that the cost of lumber is just one of many factors in residential housing, and not the top cost item.”