Biden Stands Behind Sizeable Lumber Tariffs Which Threaten Housing Affordability

December 8, 2021

By Terri Jo Neff |

The decision by President Joe Biden to sharply increase the tariff on Canadian softwood lumber to 17.99 percent is threatening housing affordability and has prompted calls from The Wall Street Journal and homebuilders for the White House to take quick action to reverse course.

More than one-quarter of softwood lumber—such as pine, cedar, fir, and spruce—used in America comes from Canada. The new tariff is twice the 8.99 percent rate in effect when Biden took office in January. It comes on the heels of wholesale lumber prices which tripled from July 2020 to July 2021, adding nearly $30,000 to the average cost of a new home, according to the National Association of Home Builders (NAHB).

The NAHB says the increased tariff is adding on average another $9,000 to the price of a new home compared to July. It is also pushing up prices of renovation and remodeling projects that are critical for ensuring affordable housing options in many communities.

“The doubling of duties on Canadian softwood lumber is ill-timed and ill-advised,” NAHB Chairman John C. Fowke wrote to Biden on Dec. 3. “As has been the case for decades, the domestic lumber industry cannot, nor will not, produce enough lumber to meet U.S. consumer demand. We rely on lumber from Canada to fill the production gap, so punitive tariffs on our closest and best trading partner on a product that American consumers desperately need defies logic.”

Top NAHB officials met at the Canadian Embassy in Washington DC last week to discuss the tariffs. After the meeting, Fowke send his letter to Biden, calling on U.S. trade officials to negotiate with the Canadian government for a lumber trade agreement that eliminates tariffs and ensures a fairly priced supply of lumber.

“The tariffs harm housing affordability by acting as a tax on American home builders and home buyers, and contribute to huge price volatility in the lumber market by putting upward pressure on lumber prices,” Fowke wrote.

The association, which has 140,000 members across the country, also called on Biden to support efforts to increase domestic lumber production. “Improving the health of our nation’s forests and increasing the supply of domestic timber are not mutually exclusive goals,” Fowke wrote.

Last month the Wall Street Journal’s editorial board noted that prices for U.S.-produced lumber is at more than 75 percent above pre-pandemic levels.

“For decades U.S. sawmills haven’t been able to meet domestic demand, but they’ve leaned on government to protect their market share,” the WSJ’s opinion stated. “The shortage would be much worse if not for Canadian lumber, which backs up U.S. output.”

The tariffs, the WSJ wrote, “will raise building costs in an already strained housing market.”

Then last week, The Washington Post’s editorial board published an opinion succinctly titled “Biden is hiking lumber tariffs at the wrong time.” 

And the editorial board for the Las Vegas Review-Journal wrote that driving up the cost of lumber via tariffs will discourage construction and worsen inventory shortages for southern Nevada. “Much like the weather, politicians love to talk about affordable housing but none of them want to do anything about it. Put the Biden administration firmly in that camp,” the Review-Journal noted.

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