The Impact Of The New Canadian Lumber Duties

This article first appeared in the June 2017 issue of Pro Builder.

More than 8,000 full-time jobs will be lost this year as the result of the new U.S. tariff on Canadian lumber, according to recent analysis from NAHB.

In April, the U.S. Department of Commerce imposed a 19.88 percent duty on Canadian softwood lumber exports to the U.S. The duties will be retroactive 90 days from the date that the rates are officially published in the Federal Register, likely back to the beginning of February.

“Protectionist measures to prop up domestic lumber producers at the expense of millions of U.S. home buyers and lumber users is not the way to resolve the U.S.-Canada trade dispute or boost the U.S. economy,” said NAHB chairman Granger MacDonald, in a statement. “As an industry that is on the front lines of this issue, NAHB would be happy to discuss this matter with the White House and seek solutions that will not harm housing affordability for millions of hard-working American families.”

Paul Emrath, NAHB vice president, survey and housing policy research, estimates that the annual impact of the 19.88 percent duty, if in effect throughout 2017, would be a loss of:

$498.3 million in wages and salaries for U.S. workers
$350.2 million in taxes and other revenue for governments in the U.S.
8,241 full-time U.S. jobs

Many of those jobs are in construction, but the effects won’t be limited to a single industry. Wages and jobs will also be lost in businesses that sell and transport building materials and that provide architecture and engineering services.

Some jobs will be gained in the U.S. sawmill industry, but this will almost entirely be offset by losses in other manufacturing industries. In total, 25 or more job types will be lost in 31 different industries. These losses of wages, jobs, and taxes are net losses that take the increases in wages, jobs, and taxes in the domestic sawmill industry into account.

Lumber accounts for a larger share of the cost of a home than any other building material. It’s used in wood-frame residential construction and is also commonly used for interior and finishing purposes, such as windows and doors. NAHB research shows that, at current prices, lumber makes up approximately $18,000 of the cost of constructing a typical single-family home.

(Click charts to enlarge)