Lawmakers Urge Action on Lumber; U.S. Trade Rep. to “Push for Solutions to the Lumber Pricing Issues”

Members of Congress and the Biden administration are heeding the concerns of NAHB and its grassroots on the need to take action to resolve soaring lumber prices, supply shortages and tariffs that are hurting home builders, home buyers, the housing sector and the economy.

(View a video montage of policymakers discussing the issue at the end of this blog post.)

U.S. Trade Representative Katherine Tai told Senate lawmakers that she would “push for solutions to the lumber pricing issues” and address the issue of tariffs on Canadian softwood lumber imports into the United States during a May 12 Senate Finance Committee hearing on President Biden’s 2021 trade policy agenda.

Tai reiterated her willingness to act on this issue 24 hours later during a House hearing in which four bipartisan lawmakers spoke about the need to seek remedies for rising lumber prices by boosting production and ending tariffs on Canadian lumber imports into the United States.

During the House hearing, Rep. Kevin Hern (R-Okla.) submitted a statement of record from NAHB where we stated that “resolving the long-running dispute with Canada over the trade in softwood lumber and addressing the steel and aluminum tariffs must be a top priority of Congress and the Administration. Building safe, decent and affordable housing depends in large part upon a stable and affordable supply of building materials.”

Separately, Sen. Jerry Moran (R-Kan.) delivered a Senate floor statement on lumber on May 11 where he cited NAHB statistics on how rising lumber prices have added nearly $36,000 to the price of a new home and a $13,000 increase in the market value of a multifamily unit. Moran called for the elimination of lumber tariffs and to “boost the domestic types of the types of lumber used in home construction.”

Finally, Sens. Moran and Jeanne Shaheen (D-N.H.) sent a joint letter to Tai this week stating that “the complete elimination of these [lumber] tariffs is necessary to provide relief from rising lumber prices. American home buyers, not Canadian lumber producers, are the ones who end up paying the cost of these trade restrictions.”

Senate Hearing Highlights

Sen. Charles Grassley (R-Iowa):  Yesterday I met with the Iowa Association of Home Builders. They told me that lumber prices had skyrocketed tremendously. They gave me a figure of 300% since April 2020. Have you had conversations within the administration on what can be done to lower the 9% tariff on Canadian lumber?

U.S. Trade Representative Tai: This is not just something we’ve been talking about within the administration but something that I’ve raised directly with my Canadian counterpart and I’ve certainly heard a lot from members of Congress about this as well. I want to assure that I will be raising this again with my Canadian counterpart at the free trade commission meeting of the USMCA and I will continue to push for solutions to the lumber pricing issues that we are experiencing.

Sen. Bob Menendez (D-N.J.):  I’ll submit a question to you [Tai] about whether you are working on a new softwood lumber agreement with Canada. I keep hearing from housing people that it is incredibly challenging.

Sen. John Thune (R-S.D.): The home builders, the realtors, everybody in my state is talking about the cost of lumber and how that’s driving up housing costs in this country and really curtailing new construction because just pricing homes in a way that is outside the reach of a lot of families in this country. One of the issues they consistently raise are the tariffs on lumber coming in from Canada. Can you speak to that issue and what’s being done to address that and the impact that those tariffs have on the cost of lumber in this country and ultimately on the cost of housing?

U.S. Trade Representative Tai: The free trade commission that is required to meet within the first year of the USMCA is meeting next week and I will be raising our concerns with the Canadians. But obviously I look forward to continuing this conversation with you and the many other members of Congress who have raised concerns about this on both sides of the issue.

House Hearing Highlights

Rep. Mike Thompson (D-Calif.): I appreciate how the pandemic has exacerbated trade issues and disrupted supply chains. This has a real life impact on my district where we just lost thousands of homes because of the deadly fires that we experienced. The surge in lumber prices is making it harder to rebuild. This is hurting real people already reeling from these fires. One way that we can help address this is by doing away with the tariffs on Canadian softwood lumber.

Rep. Steven Horsford (D-Nev.): I know earlier Mr. Pascrell [Democratic congressman from New Jersey] raised the issue around the lumber issue. I joined in that letter to you and would just ask that we receive a follow up. I am particularly concerned in Nevada with the rising housing costs and how its impacting people who are able to access affordable or attainable or workforce housing particularly as those costs escalate.

Rep. Kevin Hern (R-Okla.):   At present, the U.S. and Canada lack an agreement governing the trade of softwood lumber.  U.S. home buyers, home builders and everyone who participates in the supply chain is suffering due to these unnecessary cost increases. Last week, you in your response to Sen. Moran inquiring about the rising cost of lumber. You stated quote: “This will always be important to U.S.-Canadian relations. We have raised these issues with my counterpart already. Softwood lumber will always be in my sights. We have a lot of tools and plans to use them robustly and raise the concerns we have and engage our Canadian counterparts on how to manage longstanding differences and think outside the box.” Ambassador, can you clarify what specific tools you plan to use?

U.S. Trade Representative Kai: We have a lot of tools. There’s a NAFTA chapter that’s been brought into USMCA. Those are trade remedies that written into our trade agreement. We have our trade remedy provisions here in U.S. law. I’d be willing to sit down with my Canadian counterpart and think, “Hey, is there anything else that hasn’t been tried before that we could try?”

Highlights from Sen. Moran’s Senate Floor Speech on Lumber

The reality is that record high lumber prices are putting the American dream of a home of homeownership out of reach for hundreds of thousands of potential home buyers and disproportionately harming middle- and low-income families across our nation. At a time when residential home building is booming, it is essential that home builders and consumers have access to the materials they need at competitive prices.

In April 2017, the US Department of Commerce announced countervailing duties averaging 20 percent on softwood lumber products from certain Canadian producers. In December of 2020, the average tariff was reduced to 9 percent.

While a reduction in tariffs for some Canadian producers is a step in the right direction, the complete elimination of these tariffs is necessary to provide additional relief for rising lumber prices.

In addition to working to resolve this trade dispute, we should also work to boost the domestic production of the types of lumber used in home construction. Additional lumber can and should be sustainably harvested from public lands managed by the U.S. Forest Service and the Bureau of Land Management. Adding to the existing lumber supply and ensuring that domestic sawmills are operating at full capacity will help soften lumber prices.

View video highlights from this week’s Senate floor speech on lumber and congressional hearings.

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Comments (18)

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  1. Greg Seifert says:

    Canada is justa small part. I live in North Carolina and we have osb plants that use locally sourced pulps. These panels have gone from $8 per to $50 per sheet. I used to use alternate products in years past when osb prices would fluctuate. Today those alternatives are no longer available because the osb mfg’s purchased those companies and closed the plants. How did this get allowed. #monoply.

    • But the Canadian tariffs sparked the lumber increase by demonstrating to domestic providers the market will bear increases. We need to go back to the source and by lowering the tariffs so domestic suppliers know there is an alternative place to purchase.

      • stanley feck says:

        But tariffs actually provide a level playing field for producing domestic products
        When it comes to Lumber for housing and the multiple byproducts of Lumber related to our economy we currently have very little domestic production . Why and how to fix that is the issue !

    • Sounds like they did that on purpose so they could monopolize and charge hugely inflated prices. This is not right and Congress needs to do something about this. This is heavily affecting the housing market. And possible homeownership. People can only afford so much.

  2. stanley feck says:

    I find the whole discussion completely useless. I see nothing that actually addresses the real issues or would remotely have any effective resolution to the crisis
    1. Tariffs are nothing more than a miniscule part of the issue or resolution. Tariffs did not cause a 150% increase of lumber costs in a short few months

    There are 2 major factors for the current crisis
    1. Supply and demand
    2. Reliance on foreign countries to meet supply and demand

    The discussion should be about
    1. Why do we have to rely on foreign countries to supply the most basic abundant natural resource in the world. A natural resource that is
    A. Most environmental friendly
    B. Most easily renewable
    C. Has more economic effect than any other natual product except maybe oil
    2. How to meet supply and demand without foreign dependence

    I have my own opinions of how to begin fixing the problem however I’ll defer in hopes that others agree with the real issues and continue this discussion

  3. The “Make American Great Again” has really been great for home building. Let’s remember that when our PAC money is disbursed.

  4. Robert Steverson says:

    The softwood tariffs are currently at 9% for Canada imports of lumber which is down from 20% (as noted above). While in the article it is also noted by Sen. Grassley that he is being told of a 300% increase in lumber cost since April 2020. My experience in the cost analysis on home building products over the past year supports the 300% increase information. However, many of the lumber & building products that are experiencing this huge increase are not dependent solely on Canada softwood. It appears that the focus of legislators/lawmakers is a bit to narrow. It would be better served to the families in American wanting to build their dream home, if our law makers would evaluate this matter with a much wider focus.

    Simply reducing the tariffs to Canada will not fix a escalating problem. Other aspects driving cost could be related to shipping cost, lack labor, direct manufacturing cost & etc. Reducing tariffs can amplify other ongoing problems – such as the fact that small business/ family owned logging companies are making the same but corporate owned American mills and manufactures are increasing profits and largely controlling what the end prices will be to builders/consumers. Reducing the tariffs will flood the market with wood harvested outside of the US by foreign owned logging companies. This will reduce the economic value of privately owned US timberland and put a unnecessary strain on a US logging/trucking work force that has struggled to keep a float over the past several decades.

    Think broader in your solutions! The largest ocean waves are only made by the combining of many water droplets. There will never be one thing that fixes major problems. As major problems are only made by the combining of many small problems!

  5. Daniel Horner says:

    This is the result of shutting down the healthy workforce for months on end without considering the facts of the virus. Cheap subsidized lumber from Canada does much harm to our local economy, but I see that politicians much prefer to scapegoat the tariffs instead of the failed shutdown / lock-down policies. Let’s also not forget the other factors brought on by bad political actors ie., fuel prices, unemployment checks, currency dilution, threats of tax hikes, fleeing of blue states, etc.

  6. Eric Bell says:

    This seems like a good time to readdress domestic lumber supply. Maybe it is time to try responsible harvesting and put our lumber mills and loggers back to work. Have we learned anything about taking care of our planet? Have we learned anything about wholesale destruction of our domestic workforce? Let’s get Americans back to work and leave the Canadian tariffs in place until we can balance trade.

  7. If you think the 9% tariff on Canadian Lumber is the total reason your not paying attention. We are seeing multiple cost increases in Drywall and materials, all things metal, and roofing materials. Interior products are just beginning to take increases such as Doors and base and case products. There are companies who are just cashing in on the wave and it is costing the home buyer. They pay for it up front and then pay again on their 15-30 year mortgage in interest.

    if your paying attention at all then you would realize that we need someone looking into excessive charges and lack of labor. Our private forests have been cut and cut again. Federal Timber lands have been hard to access and maybe that should be discussed.

  8. James Moore says:

    A small tariff on Canadian lumber is not the problem. The problem is the consolidation of the mills. This is nothing other than the pricing power of the producers. There are too few major players and they are able to take advantage of the market. I don’t believe they can’t find workers. If you raise prices by 300%, you can pay enough to get all the workers you need.
    If we can break up the oil majors, we can break up the producer oligopoly.
    Make a few phone calls to Weyerhauser and Georgia-Pacific, etc. with an anti-trust attorney on the line and you will see prices fall.

  9. Jason Wampler says:

    What a ridiculous time to have tariffs on lumber and steel. There’s such a need for affordable housing and updated infrastructure all over the country, but the raw material costs will prevent much progress from being made. Everything is going to cost more than it should.

  10. stanley feck says:

    Well said ! Tariffs on any product are the result of “Fair Trade Balance” . Lumber tarrifs are not the issue and at best represents only 10% of the 150% price increase over the last 6 months. Tariffs were imposed quite awhile ago causing a temporary panic increase and ultimately prices fell back to normal . To further elaborate on Eric’s comments we should be discussing and resolving the following
    1. Dependence on foreign countries for a commodity we could easily provide ourselves which is caused by
    A. Forest mismanagement
    B. Overregulation

  11. William White says:

    After reading above comments, there is no mention or discussion of one aspect of the rising costs, which triggers 5 questions in my mind:
    1: Landowners, are you making more money from the sale of lumber?
    2: Loggers, same question.
    3: Dealers, same question,
    4: Contractors, same question.
    5: Manufacturers, different question,, How much more are you making??

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