Biden’s New Tariffs Might Mean You Can Finally Afford to Remodel Your Kitchen
The COVID-19 pandemic has seen lumber prices almost triple as many sawmills were shut down and home renovations became popular quarantine activities. New tariffs on Canadian lumber from the Biden administration could now functionally rebalance the lumber supply, and reduce prices in Canadian markets.
Virtually all sawmills in Canada are now operating at full capacity in an attempt to catch up, although mills in the United States have been much slower to get back up and running explains Kevin Lee, CEO of the Canadian Homebuyers Association in an interview with CBC News. That means Canadian mills are trying to handle the demand on both sides of the border.
"It's a North America lumber market," Lee said, "and lumber has had a tough time keeping up."
Canada is the world’s largest exporter of softwood lumber, worth $10.9 billion in 2017. Three quarters of that goes to the United States.
Now the Biden administration has announced plans for an increase on Canadian lumber tariffs from 9% to 18%. The move has been criticized on both sides of the border, where the impacts are going to be felt most strongly by Canadian lumber producers and American consumers.
It’s the latest update in a lumber dispute the countries have had since the 1980s – most recently tariffs were increased to 20% in 2017 by the Trump administration as a means of political negotiation. The Trump White House then reduced those to the present-day 9% to combat lumber prices increasing.
The real winners here may be Canadian consumers. The tariff hike will reduce the competitiveness of Canadian lumber in its largest export market, therefore increasing the supply here at home. This means we could see these sky high prices finally start to falter.
Time to draw up that gazebo.