A new lumber tariff has some worried that American consumers will be hurt by the higher prices and home affordability will suffer. What’s your take?
On April 24th, U.S. Secretary of commerce Wilbur Ross made an announcement following the department’s investigation into what American lumber producers have characterized as “unfair subsidies that the Canadian government offers its lumber industry.”
The department has concluded that Canada has been inappropriately subsidizing softwood lumber exporters. In the coming days, U.S. Customs and Border Protection will begin collecting tariffs on shipments coming across the border in the form of cash deposits. Rates will vary across Canadian companies, some paying as little as 3% while others pay 20%. The majority of the Canadian exporters mentioned in the department’s investigation will be forced to pay tariffs on shipments within the last 90 ninety days.
NAHB – Lumber Tariffis “Short-Sighted Action”
Secretary Ross’ move has been widely criticized, especially by the National Association of Homebuilders (NAHB), which has been lobbying diligently against the lumber tariffs. They conclude that the lumber tariff will result in higher prices for newly built homes, as the cost of supplies will increase. “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 in a statement.
NAHB Predicts Negative Impacts on U.S. Consumers
“This is going to increase the cost of construction of residential houses,” said Jerry Howard, CEO of NAHB. “Producers will try to pass on the cost to consumers if they can.” According to the NAHB, a 19.9% lumber tariff would result in a 6.4% increase in prices paid for newly built homes by consumers in the U.S. As an example, the price of a single-family home would increase by $1,236.
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