Rising Lumber Prices Brought Long-Simmering Canada/US Dispute to Forefront

Cleveland OH, September 14, 2021 – Between April 2020 and June 2021, the cost of lumber in the US increased a breathtaking 288%. The surge in lumber prices brought a long-simmering trade dispute between the US and Canada to the forefront. For years, the US imposed a levy on Canadian lumber because of what it deemed to be unfair government support.

Most recently, the Trump administration imposed 20.2% duty on Canadian softwood imports in 2017. Following a court decision at the WTO that went against the US, it lowered the rate to 8.9% in November 2020. While Canada approved of the decreased rate, it continued to challenge the duty itself and vowed to work towards an agreement.

As lumber prices surged in the US numerous stakeholders in the country pushed for a resolution to the dispute. The Home Builders Association, for example, has been particularly active in this regard because of the impact the dramatic rise in lumber prices has had on its members. Government officials have also pushed for an agreement. For instance, 100 house members wrote to the US trade representative, Katherine Tai, to work towards a resolution of the lumber with Canada.

Without an agreement, both Canadian forestry activity and related equipment spending will continue to be hurt by the duty imposed on its exports. At the same time, relief from the high lumber prices in the US is likely to be delayed without additional supply.

For additional information about the Forestry Equipment markets of the US and Canada see the Freedonia Group’s Global Forestry Equipment.