Headaches over the supply and price of North American lumber likely will persist for several years, the CEO of the National Association of Home Builders told lumberyard executives today, adding that one solution he’s working on is to promote imports from Chile and perhaps Brazil.
“I think it’s going to take four to five years to have a resolution to the Softwood Lumber Agreement (SLA),” Jerry Howard told members of LBM Advantage, a buying co-op, at its annual meeting in Orlando. He was referring to the now-expired trade pact between Canada and the United States that is expected to result in tariffs of as much as 30% being imposed this spring.
In the meantime, “builders are telling me they are having trouble getting commitments for the lumber packages for some of their products,” Howard said. “The lumber issue is one that’s extremely relevant and is slowing down the spring selling season.”
The SLA actually expired in October 2015, but it contained a one-year ban on either side taking any action against the other. Starting in October 2016, American lumber producers filed complaints against their Canadian counterparts, claiming Canadian lumber was being sold in the United States at unfairly low prices. Howard said Canadian lumber accounts for 28% of the framing material used in new homes; other estimates put Canada’s contribution at up to a third of American wood consumption.
Howard noted that recent rulings in the United States appear have backed the American side, and the new Trump administration’s views also cloud the outlook. While having Donald Trump in the White House is good for construction on many fronts, “on Canadian lumber, President Trump’s administration is likely to be protectionist,” Howard said. “And that means there’s likely to be a long fight.”