Commerce Department Cuts Lumber Tariffs from 20% to 9%

Filed in Advocacy, Material Costs by on December 1, 2020 166 Comments

With lumber prices experiencing extreme price volatility this year and harming housing affordability, a final determination of the first administrative review by the U.S. Commerce Department to reduce duties on shipments of Canadian lumber into the United States by more than half is good news for American home builders and home buyers.

“The Commerce Department’s action to reduce duties from more than 20% to 9% on softwood lumber shipments from Canada into the U.S. is a positive development, but more needs to be done,” said NAHB Chairman Chuck Fowke. “Tariffs have contributed to unprecedented price volatility in the lumber market in 2020, leading to upward pressure on prices and harming housing affordability for American consumers. The U.S. needs to work with Canada to end the tariffs and achieve a long-term, stable solution in lumber trade that provides for a consistent and fairly priced supply of lumber.”

This latest development on the tariff front comes at a particularly opportune time, with the Random Lengths Framing Composite Price moving lower since mid-September but still up more than 60% since mid-April.

Lower tariffs would mitigate uncertainty and associated volatility that has plagued the marketplace, which could help ease upward price pressure on lumber prices.

Another positive development is that housing construction and new home sales have moved forward at a robust pace in recent months as lumber prices have receded from unprecedented highs. Lumber prices peaked above $950 per thousand board feet in September and are now down to roughly $560 per thousand board feet – which is still at an extremely high historical level.

NAHB continues to work on all fronts to find solutions that will ensure a lasting and stable supply of lumber for the home building industry at a competitive price.

For more information on the tariff reduction, contact Felicia Watson at 800-368-5242 x8229.

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  1. Andy Adams says:

    Thx for the info. We are in the beginning stage of having a home built. Good news

  2. Any home builders care to weigh in if this news will reduce home sale prices, or at least keep them from rising again in January?

    • Ben says:

      I’m a small custom home builder out of the Houston area.
      With so much competition and land being a major factor on builds. I roughly only profit $45,000 per build. Right now land is $100,000 per acre.

      So, with lumber being this high I’m eating into my profit.

  3. There is no good reason to continue any tariff on lumber from Canada. There is no possibility of dumping! The fires in the Northwest make this correction even more critical. Yellow pine is so difficult to keep straight with labor costs so high replacing studs is time consuming and unaffordable. Without these low mortgage rates we will lose any thought of affordable housing, for sale or rental. This is a huge problem as unwanted available yellow pine follows the increases with the price of fir leaving no incentive to increase production or new mills with monopoly.

  4. Don Simons says:

    I am really perplexed about this article and the author’s insinuation that the tariffs are the big reason or if you don’t know any better the only reason for the volatility.

    The tariffs may need to be addressed and may add to the volatility but it is far from the reason for the volatility. Try the good old supply and demand reason. People have been moving from big cities and covid controlled locked down states and was doing so even when lumber was at it’s highest.

    We buy our share of lumber that most all of it comes from Canada and I can tell you the mills were/have been taking every advantage they could to push up the price. There were days we called on pricing and call back 20 minutes later the price was no longer good and or the lumber not available. We had and still do have train cars not showing up when they were susposed to because someone sold lumber that wasn’t truly availble.

    Months ago our I-joist manufacturer, based in Canada, which uses a solid sawn flange on all their joists could no longer get the stress-tested lumber they need for it from their source to manufacture with.

    Then there is the trucking issue to add to it.

    We are not alone with our lumber buying experience and tariffs are far from the current lumber pricing issue.

    • Michael L. Curtis says:

      A Great Point!
      Also, does Canada charge a tariff on OUR Lumber??
      Surely there are American Lumber Mills..
      Are THEY affected by other Countries tariffs?

  5. Rick Byers says:

    100% of tariffs should have been removed!!! Housing is about the only thing keeping this economy afloat. There is not enough trade to create an imbalance important enough to injure housing affordability

    It’s high time OUR GOVERNMENT starts working for the people and small businesses

  6. TOM EMBACH says:

    GREAT JOB!!

  7. Mark B says:

    my home, owner -builder project, has been shuttered as a result of the extreme lumber price inflation. I have a concrete foundation with the plumbing , electrical, pad prep and lot costs all installed and paid for but now covered and stopped . My lumber material bid from July 2020 doubled in October 2020 when I needed to start framing. The money in my build budget is just not there to dump literally $20,000 more into lumber so I have shuttered the project. I will need lumber to drop back to July 2020 prices to finish this build or the neighbors can enjoy looking at a flat piece of concrete with pipes sticking up for the for seeable future

    • Jen says:

      My new home is on hold for the same reason. So far I have the lot and the plans that are halfway finished. I’m in a holding pattern for now, staying with family as I sold my previous home. Here’s hoping prices come down some.

    • Pf says:

      Here it is Feb. 2021 & I am in the same position. Cement pad with plumbing in place. Not sure whether to stop now, complete the shell & then put on hold, or just keep going until I run out of money. We’re paying cash so interest rates are a moot point but I don’t have a magic money tree 🥴 so when the funds are depleted, it won’t matter what’s left undone, I’ll have no choice but to stop.

    • Ben says:

      I’m right there with you guys.
      I was telling myself, “this rain and winter weather will be my excuse to slow down my build.”
      We are in the end of February the lumber prices are still going up even after we read that the tariffs have been adjusted.
      How long does this usually take to trickle down to the pheasants?

      • dave Fullard says:

        These were reduced by Trump by executive order in Dec, when this article was written. Then after Jan 21, Bidens first stack of executive orders that he sat down and signed included 1 that added the terrifs back on Canada and here we are, back in the 980’s per 1000 bdft., spend what you have to get weather tight and complete as you can from thereon. You will come to find that all of the other materials that use Petrolium or steel for production have already applied their price increases which are here to stay..

  8. Thank you, Jerry Howard, Deb Malone, Jim Tobin, Felicia Watson, and the entire NAHB Team to help reduce lumber prices today and tomorrow!
    ONwards and UPwards with common sense and business development for our members and future members! What fantastic news to use as recruiting and retention news to achieve improved membership!
    NAHB works for the membership 24/7!

  9. Will the change in tariffs reduce lumber prices today or will the prices slowly drift downward?

    • Derek Weekley says:

      Edward,
      Unfortunately suppliers will have to go through their current inventory at the higher purchased price, however, the way product is moving it shouldn’t take that long!

  10. Richard White says:

    THX! Our multifamily clients are waiting on the sidelines until this gets down to the supplier level.

  11. Daniel Sirois says:

    Thanks for the information greatly needed

  12. Eric Vater says:

    As a small builder, any relief is good news. Lumber prices are truly out of control. I would ask, does anyone know how long it should reasonably take to see the market price drops actually catch up in the lumber yards?

    Of course, the salesman will tell you they bought lumber during the peak and have to sell through the inventory before they can drop prices. But, they also raised prices as soon as the market went up and we all know they were still using inventory bought at pre-pandemic pricing.

  13. Frank G says:

    The price of our lumber package for our home doubled from June 2020 to September 2020. We currently have a foundation ready for concrete that will be poured this week but unfortunately we do not have the contingency needed to offset the higher price of lumber. We too are riding the “wave” with continued hope and faith that the prices will continue to decline back to “normal”. The cut in tariffs is a start and a small sigh of relief but as the chairman has stated more needs to be done but at this point, something is better than nothing!

  14. GLC says:

    Aren’t there thousands, if not millions of acres of pines that Americans grew to harvest for building, but, for some reason, cannot?

  15. Billy Jack Childs says:

    The price was $650 then and now its pushing $1200. The price has almost doubled since the tariff was reduced by 11%.

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