The U.S. construction market consumes at least 50 billion board feet of lumber annually, but domestic production meets only 70% of that demand. The U.S. closes the gap by importing the rest, mainly from Canada.
President Trump wants to change that. He said the U.S. has plenty of trees for timber but is hemmed in by regulatory burdens and slow environmental reviews.
He is directing the government to reduce bureaucracy surrounding timber production and increase sales from trees on public lands.
Mr. Trump is pairing that with an investigation into whether U.S. reliance on imported lumber is a national security concern, setting the table for new tariffs on Canadian lumber as part of his get-tough trade strategy.
“We don’t need their lumber. We don’t need anything that they give. We do it because we want to be helpful, but it comes to a point when you just can’t do that,” Mr. Trump said last month about Canada.
Lumber analysts say the U.S. has relied for decades on high-quality spruce pine from Canada, particularly British Columbia, and big changes won’t happen overnight.
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“We don’t have the lumber production capacity. The U.S. would have to build 70 new sawmills to make up the difference. A new sawmill costs roughly $250 million to build and takes two years,” said Pete Stewart, CEO of ResourceWise, a data analysis and research firm that studies forest products.
Mr. Stewart said tree growth in the U.S. Northwest is roughly equal to harvests, so those areas could not satisfy more domestic demand unless the U.S. Forest Service releases vast amounts of timber for harvest.
Mr. Trump seems willing to try. An executive order he signed in March directs the Forest Service, the Department of the Interior and other agencies to boost timber sales from public lands.
“The United States has an abundance of timber resources that are more than adequate to meet our domestic timber production needs, but heavy-handed federal policies have prevented full utilization of these resources and made us reliant on foreign producers,” the order says.
Southern forests from Virginia to eastern Texas, meanwhile, tend to grow 30% more trees than sawmills demand.
“The area where it could be enlarged could be the Southern states. Lumber takes time to grow. They could increase it on a one-time basis, but then they need to have the continuing growth,” said Gary Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics.
Softwood lumber is a critical component of homebuilding. Canada satisfies roughly a quarter of the U.S. demand for the material, so attempts to make the U.S. fully reliant on its own trees would be a major shake-up.
Canada is “a close neighbor. It obviously has good logistics to the U.S.,” Mr. Stewart said. “It’s just the way the market’s operated.”
Timber professionals in Canada point to the quality of their products.
“Canada provides high-quality lumber, which U.S. consumers have a strong preference for,” said Kurt Niquidet, president of the B.C. Lumber Trade Council.
He said Canada’s main lumber product, spruce pine fir, doesn’t warp or twist and is ideal for framing homes.
“It has a good reputation among homebuilders for framing homes as compared to U.S. species such as southern yellow pine,” Mr. Niquidet said.
However, Washington and Ottawa have a long-running dispute over whether Canada unfairly subsidizes its supply by charging timber cutters a relatively low fee to cut from publicly owned forests.
U.S. timberlands are mostly in private hands in states such as Georgia, Alabama, Oregon, Washington and Maine, and private forest owners tend to charge higher prices for harvesting trees when demand is strong, the Peterson Institute said.
“These differences have led to a succession of antidumping actions by the U.S., despite the desire of U.S. homebuilders to purchase lower-priced lumber from Canada,” the institute says on its website.
The National Association of Home Builders said it was glad to see exemptions for lumber imports in Mr. Trump’s latest tariffs on Canada, Mexico and other nations.
Still, the Commerce Department has imposed a 14.5% tariff on Canadian lumber since 2017 and recently published plans in the Federal Register to more than double that rate.
On top of that, Mr. Trump ordered his team to investigate whether unfair subsidies or foreign support for timber industries have resulted in a flood of imports threatening national U.S. security.
The “Section 232” investigation into lumber, like similar inquiries into pharmaceutical and semiconductor imports, could set the table for additions to Mr. Trump’s menu of tariffs on goods from other nations.
“It’s clear we are not out of the woods yet on the possibility that Canadian lumber tariffs could run even higher than 34.5% later this year,” the homebuilders association said.
Homeownership is already out of reach for many Americans, so anything that increases the cost of houses, even on the margins, could be a hot-button issue.
“It’s a political issue. It sways voters,” Mr. Stewart said.
Mr. Trump’s executive order on national security says lumber is critical for the civil construction industry and military procurement.
It asks whether the domestic supply is sufficient to reduce imports and “whether additional measures, including tariffs or quotas, are necessary to protect national security.”
Section 232 investigations must be completed within 270 days.
“Canada has a bull’s-eye on it here,” Mr. Stewart said.
At the same time, he said, it is hard to say with “a straight face” that Canadian lumber poses a national security threat.
“We are importing from one of our most friendly allies and neighbors,” he said. “How does lumber impact national security? Obviously tangentially, but not really. So I think that’s going to be a tough battle.”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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