Proposed Lumber Pact Seen Harming Home Builders

Proposed Lumber Pact Seen Harming Home Builders

Washington, DC A proposed quota settlement of the longstanding U.S./Canada softwood lumber dispute "represents a blow to free trade that would harm consumers, housing affordability and millions of workers in lumber-dependent industries," the National Association of Home Builders has charged.

The proposed pact, now under discussion by U.S. and Canadian officials, is designed to replace the current situation in which Canadian lumber firms are paying across-the-board duties averaging 27%. Canada has challenged the legality of the U.S.-imposed tariffs.

Last year, Canadian softwood lumber imports totaled nearly 34% of the U.S. market. Under the proposed accord, Canadian shipments above 31.5% would be subject to a punitive tariff of $200 per 1,000 board feet (or about 65% of the average value), "effectively imposing an inflexible ceiling on imports [and] restricting competition in the marketplace," the NAHB charged.

"Artificially capping Canada's duty-free share of the U.S. market and then charging prohibitive tariffs will limit lumber supplies and raise [softwood] costs," said NAHB president Bobby Rayburn. "It is essentially a hidden tax on U.S. home buyers and consumers."

A typical new home requires about 16,000 board feet of framing lumber, the NAHB noted, adding that the proposed new tax "could add thousands of dollars to the cost of a new home, which in turn would bump out of the market many borderline buyers." It could also greatly increase the cost for remodeling, the NAHB said, adding that it would be "impossible" to meet current housing demand without the imports in question.