8 ms·

U.S. moves to double Canadian lumber tariffs

88 points by endtwist 5y ago

ska 5y ago
This is part of a long, drawn out disagreement (e.g. see https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_softwood_lumber_dispute https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_s...)
- peeters 5y ago
  It's worth noting the WTO has repeatedly ruled in favour of Canada that this cost structure does not amount to subsidization. This is just pure pandering to the U.S. lumber industry. Guess what? Canada has a lot of forested land. It's one of our plentiful natural resources. Most countries allow exploitation of their natural resources. The U.S. argument amounts to nothing more than "we don't like that they have a lot of trees and that that makes our trees less valuable". Canada is a net exporter to the U.S. of raw materials and a net importer from the U.S. of finished goods. The only reason they attack lumber is because unlike every other raw material, lumber doesn't make its way into many things that the U.S. exports.
xyzzyz 5y ago
Good, lumber has been too cheap lately, which was pushing construction costs down and depressing house prices.
- jvreeland 5y ago
  right, what we needs is high housing prices.
  - mywittyname 5y ago
    Now I know how the people who got in early on real estate in SF or Seattle feel.
  - vkou 5y ago
    This is a great narrative, until we remember that lumber is a tiny fraction of the price of a house.
    - rwcarlsen 5y ago
      It was, but now it's actually a very significant component. In many regions, the cost paid for lumber went from like 5% of the cost to ~20%!
    - ncann 5y ago
      It still adds 20-30k when building a new house so not exactly a trivial amount.
      - vkou 5y ago
        Which in practice just means that the land didn't get a chance to appreciate by 20-30k. Houses cost every spare penny that we can save up to pay for them. Whether the pennies end up going into raw materials, or speculators doesn't really matter to the end purchaser. If labour and materials became free tomorrow, the cost of housing would remain unchanged, but the cost of land would rise to pick up the slack.
        rhodozelia 5y ago
        Thank you for a very insightful comment. Houses are worth what people will pay for them, and when you can borrow money so cheaply they are worth a lot! What else are you going to buy? Having a nice place where you spend a lot of time that is near things you do be it work or recreation is worth as much as you can afford to pay - a house in a good location saves precious minutes of your life!
        deleted 5y ago
        [deleted]
- pmastela 5y ago
  Am I completely out of the loop or is this sarcasm? I thought the lumber costs were skyrocketing and housing prices were too. At least in the US, I thought this was the case.
  - eberkund 5y ago
    Sarcasm, the exact opposite is true.
  - MattGaiser 5y ago
    Not OP, but it is sarcasm. Lumber is at record prices. https://tradingeconomics.com/commodity/lumber https://tradingeconomics.com/commodity/lumber
    - wyldfire 5y ago
      Wow, history goes back to 1979. Roughly same 200-600 USD envelope until 2020.
      - bobthepanda 5y ago
        Are those 2021 dollars? The 1979 value of $200 would be $735 today.
  - rhinoceraptor 5y ago
    Sheathing plywood and OSB are now basically as expensive as cabinet grade hardwood plywood. It's insane.
    - rwcarlsen 5y ago
      In many places cabinet grade hardwood plywood is cheaper! I could sheath my roof and house with 3/4" cabinet grade maple for the same price as "cheap" ugly OSB.
- happytoexplain 5y ago
  Dry sarcasm is ambiguous online.
  - belval 5y ago
    Normally I would agree with you but lumber prices have been so high in the last few months I'd say the sarcasm is warranted.
Mountain_Skies 5y ago
This is a weird decision given that the eviction moratorium has been overturned by the courts and millions are going to be facing housing difficulties over the rest of the year as those evictions start to happen. Both the sales and rental markets are very low on supply right now. Increasing housing costs through higher building expenses seems like it will end up being a political land mine.
deleted 5y ago
[deleted]
RoadieRoller 5y ago
(I am not a US citizen, but visited many times) Why not build houses using concrete/cement? Poor Asian countries have been building houses for decades using concrete and less maintenance. No, it is not about weather. Concrete can be easily used in Southern US states where winter is less than a month or no snow at all. At least the structure can be concrete and the walls be wood or drywall. I think it is the wood mafia trying to make a living out of enforcing city codes to use only lumber for houses.
- MattGaiser 5y ago
  Americans tend to want very large homes by global standards and lumber is (or at least was) cheaper.
- clusterfish 5y ago
  It's more expensive and has a terrible environmental impact. Forestry at least can be sustainable if done right
- spideymans 5y ago
  Environmental concerns are one reason. Concrete is more environmentally intensive than lumber, and the construction industry already accounts for a significant portion (about 10%) of global GHG emissions. We should be moving away from using concrete when more sustainable alternatives exist.
- hwbehrens 5y ago
  It varies between regions, but in general, building with wood is significantly faster and less expensive than using concrete. They are also easier to remodel, extend, and ultimately demolish, but these are secondary reasons. Some areas, such as regions of Florida or Arizona for example, have substantial historical housing stock made from concrete. However, the majority of new construction is wood for the reasons stated above. There are not (to my knowledge) any building codes that prohibit concrete construction for residential.
  - gresrun 5y ago
likecarter 5y ago
There is a glut of trees in the U.S., not processed lumber. Not sure how this helps the landowner lobby pushing for this tariff.
- kokanator 5y ago
  It helps the large timber land holders. ( weyerhaeuser, Fraser, GP and their friends/competitors )
kokanator 5y ago
Policy bankrupts large swaths of the logging industry. We create restrictions that substantially increase the cost of harvesting timber on public forest lands ( and add fuel load btw ). This has left major land owners as our primary source of timber ( read monopolistic ). Allow these timber companies to ship our timber overseas to create an intentional artificial shortage ( yes it is documented ). I know, let's solve this problem by adding tariffs on timber from Canada who openly supports their timber industry. Alternatively, you could fix the problems at home! ( Might be a little tainted as I grew up when the spotted owl shutdown the living for entire towns in Washington and our fathers had to go to Alaska and Canada for years to make money to send home. )
- lhorie 5y ago
  > Allow these timber companies to ship our timber overseas to create an intentional artificial shortage ( yes it is documented ). Am I understanding right that this would mean US would be incentivized to not export lumber (since domestic demand would grow in response to the increase in canadian lumber prices), and conversely, Canada would just fill the export gap left open by the US, leaving Canada in a stronger, more diversified trade position and the US in a worse, nationalist position? Or am I missing something?
  - kokanator 5y ago
    I am having a difficult time wading through current "shortage" links to find the original information. However, here is the gist. - The inventory of raw timber ( the type you see in log yards ) has grown too large. - Lumber mills are lowering the amount they will pay for raw timber as a result. As well as the rest of the end lumber market. - This causes timber companies profit per foot to drop. - The timber companies decide to "export" raw timber overseas at a loss. - This in turn raises the rate the Lumber mills and Lumber consumers pay out pacing the original loss on "exported" timber. It is important to also note, most of this timber came from public lands to begin with. The overall point is OUR resources were exported at a loss so OUR prices would increase. Forests are part of the wealth of our country. Letting a timber company send it overseas to increase domestic timber prices should be illegal.
btbuildem 5y ago
As a Canadian - awesome! (Given that I understand the consequences correctly, that is.) The incredible demand, coupled with supply chain troubles, has driven up the price of lumber here nearly 300% A 8' 2x4 was $2.95 this time last year, today it's $10. I hope this cools the exports of lumber from Canada, and we see the prices move back towards a sane level.
- partiallypro 5y ago
  This would actually drive up the price even more though? Demand for lumber is pretty inelastic.
  - enragedcacti 5y ago
    In the US it will, in Canada it should go down given that exports to the US will slow and thus internal supply will increase.
- nightowl_games 5y ago
  As a Canadian, I disagree. The US has unfortunately been shafting Canada on softwood lumber for decades[1]. Your implying that Canadian logging companies are just going to sell cheaper lumber to Canadians. I would say that that's just one piece of the picture. Canada's economy is based upon selling resources to the United States (mostly oil). The United States historically has abused their monopoly on buying Canadian resources. Since the US is a much larger and stronger country, the US essentially sets the rules. If American companies stop buying Canadian lumber, it will be a net negative for Canada. We have a massive deficit due to our massive covid stimulus spending. We need American money more than they need Canadian lumber. 1: https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_softwood_lumber_dispute https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_s...
  - Teever 5y ago
    > Canada's economy is based upon selling resources to the United States (mostly oil). Oil & Gas accounts for less than 10% of the Canadian economy.
tengbretson 5y ago
If this actually works to shore up the domestic end-to-end supply chain for lumber and lumber products so that we don't have to rely on growing and harvesting trees here, sending them across the world for processing, just to ship them back as plywood and other wood products then great! Based on what products this is targeting and the current domestic labor situation here it appears that this will absolutely not be the case.
clusterfish 5y ago
Canadians: meet the new boss, same as the old boss. Trump's steel tariffs are still in place too.
- gher-shyu3i 5y ago
  If Trump ordered this it would be all over the news. The double standards are astounding.
  - peeters 5y ago
    This was all over the news. That said nobody in Canada was expecting Biden to be less protectionist, it was clear he was cut from the same cloth as Trump as far as his thoughts on globalization and allies went.
    - nightowl_games 5y ago
      I dont think the historical arguments about Globalization hold up in a post-covid world. We are seeing a massive CPU and GPU shortage. TSMC is a nexus of world trade. We saw a massive Suez canal blockage. The merits of locally produced goods are far more apparent now than ever before. We are in a new age.
      - peeters 5y ago
        We also haven't had a world war in 76 years. I'll take an occassional shortage on non-critical goods over a major war every 20 years.
      - Matticus_Rex 5y ago
        Given the estimated gains of globalization just in economic terms (to say nothing of worldwide economic stability in most situations), which are in the 14-figure range, there's significant doubt here. Yes, there's likely room for things to be made in more than one place in many instances. But global comparative advantage is still the single greatest contributor to rises in global standards of living. Billions of people have been raised from extreme poverty due to globalization in the last few decades. Those shortages we occasionally get are market opportunities that will encourage new market entrants. We don't need to attack globalism to get redundant production.
nafizh 5y ago
Incredible. Instead of putting tariffs on Chinese cheap stuff that most people can get by without, US is putting tariff on one of the main exports of its closest allies.
- hahahasure 5y ago
  Both were painful to US citizens. No reason to paint team Red or Blue was better or worse.
- nightowl_games 5y ago
  You should see what the Koch brothers have down to our oil industry and politics!
  - Matticus_Rex 5y ago
    The Koch brothers actually are against all or nearly all tariffs, incidentally (like most economists).
    - yostrovs 5y ago
      It is indeed amusing to see people accused of being the very opposite of what they are. The Kochs, if anything, are against limitations on free trade.
- sudosysgen 5y ago
  Well yeah, the US has been doing that forever. There is an economic incentive to fuck over Canada, and none to stop enjoying cheap labour and efficient supply chains from China. The US pretty much only does things when it is in it's interest, and if that happens to be a good thing it will be spun as a principled decision but that's generally a coincidence.
hourislate 5y ago
It's interesting who owns a lot of the saw mills in Canada. https://www.lesprom.com/en/news/13_biggest_lumber_companies_increase_production_by_2_3_to_34_2_billion_board_feet_in_2017_82957/ https://www.lesprom.com/en/news/13_biggest_lumber_companies_... *Four of the top ten largest firms are based in B.C. (West Fraser, Canfor, Interfor and Tolko), with the first three holding substantial sawmilling assets in the U.S.* So it seems these Corps own assets on both sides of the border and it isn't clear how these tariffs help them. From what I understand (possibly wrong,) there has even been more consolidation in the Lumber Industry in the last couple of years and like 5 Companies own all the Sawmills on both sides of the border.
- ska 5y ago
  > So it seems these Corps own assets on both sides of the border and it isn't clear how these tariffs help them Maybe that's looking at it the wrong way; tariffs and trade battles are going to happen anyway, if I have operations on both sides of a border in a way I'm hedged against their impact.
joejerryronnie 5y ago
This is simply a response to the new Canadian digital tax.
hahahasure 5y ago
I can't understand why both political parties are so bad for the 100%. Rich to poor, it seems everyone is constantly losing. Who wins? A lumber yard owner? The employees need to buy homes, so they lose. Are we really doing these anti market policies for the benefit of less than 12 people.
belval 5y ago
I can't say that I understand that move since the price of lumber is at ATH but as a Canadian if it reduces the price for wood (and housing) I am all for it.
jypepin 5y ago
Very surprised to see some arguments in the article saying lumber only make 4% of construction prices. I'd love to know what type of construction they're looking at. We're currently in the process of building a house and current lumber prices (because of covid mainly) are definitely impacting costs, to the point that it's one of the first thing that both our architect, and then builders mentioned. Everybody involved in the trade have mentioned the idea of waiting an extra year before building, mostly because of lumber prices.
- Beached 5y ago
  in a traditional 2x4 construction stick built home, the amount of cost wood has is very low, iiiiifffff you exclude premium wood products like hardwood flooring, cabinets, trim, etc. I believe the 4% estimate is fairly accurate for traditional rough in.
glonq 5y ago
Countdown to WTO ruling in Canada's favor [again]...
Robotbeat 5y ago
This is bad. I thought the tariff would’ve been reversed given the soaring lumber price and inflation fears.
dukeofdoom 5y ago
Maybe China will step up and take in the extra lumber. Canada increasingly relies on exports to China anyway. Canadians are holding joint military exercises with them. And Chinese investors are buying up prime property in Canada. Nothing wrong with it. Just the way the cookie crumbles.
- 908B64B197 5y ago
  > Nothing wrong with it. Pierre Trudeau was the one who opened trade with China. He was also a close personal friend of Fidel Castro. Interesting how the son is following in the footsteps toward authoritarianism.
hedora 5y ago
For reference, the base price/square foot of new construction increased 20% when Trump introduced these tariffs. He also tariffed Chinese concrete at the same time. The reason it went up so much is (like any other business), contractors and manufacturers need to preserve their profit margins, multiplying the impact of the tariffs for new home builders. It also allowed domestic producers to hike their prices (which they did). Also, the tariffs caused many substitutions of slightly more expensive (but now cheaper) materials, leading to bizarre shortages and more price hikes. Then, covid hit and now this. It’s a complete disaster. Is the department of commerce actively trying to get Trump back in in 2024, or do they just like inflation, homelessness and high interest rates?
- imtringued 5y ago
  Yeah, it really is weird, there is nothing wrong with demand increasing and everyone starting to build housing, however there is something very wrong about making it harder to build houses than absolutely necessary. Those tariffs made sense in 2018 but they don't make sense in 2021. Everyone considers USA an export destination where every country dumps their products, that means some degree of unemployment is unavoidable because these countries run trade surpluses on purpose and they won't stop them. Right now unemployment is on a heavy downward trend, which means there is no need for protectionism anymore.
Haemm0r 5y ago
Currently those tariffs have a big impact on the markets in Germany, Austria and others in Europe too. According to the media the US is buying wood at large [e.g. 1] in combo with local companies trying to stock up prices for wooden build home increased 20-30% in the region. If you talk to local carpenters (Austria) lead times are a roulette game and prices change daily. The post-covid effect may complicate things furthermore. [1] https://www.bloomberg.com/news/articles/2021-05-12/u-s-lumber-importers-are-driving-buying-mania-for-european-wood https://www.bloomberg.com/news/articles/2021-05-12/u-s-lumbe...
deepserket 5y ago
$inflation here we gooooo$

88 points by endtwist 5y ago

ska 5y ago

This is part of a long, drawn out disagreement (e.g. see https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_softwood_lumber_dispute https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_s...)

peeters 5y ago
It's worth noting the WTO has repeatedly ruled in favour of Canada that this cost structure does not amount to subsidization. This is just pure pandering to the U.S. lumber industry. Guess what? Canada has a lot of forested land. It's one of our plentiful natural resources. Most countries allow exploitation of their natural resources. The U.S. argument amounts to nothing more than "we don't like that they have a lot of trees and that that makes our trees less valuable". Canada is a net exporter to the U.S. of raw materials and a net importer from the U.S. of finished goods. The only reason they attack lumber is because unlike every other raw material, lumber doesn't make its way into many things that the U.S. exports.

xyzzyz 5y ago

Good, lumber has been too cheap lately, which was pushing construction costs down and depressing house prices.

jvreeland 5y ago
right, what we needs is high housing prices.
- mywittyname 5y ago
  Now I know how the people who got in early on real estate in SF or Seattle feel.
- vkou 5y ago
  This is a great narrative, until we remember that lumber is a tiny fraction of the price of a house.
  - rwcarlsen 5y ago
    It was, but now it's actually a very significant component. In many regions, the cost paid for lumber went from like 5% of the cost to ~20%!
  - ncann 5y ago
    It still adds 20-30k when building a new house so not exactly a trivial amount.
    - vkou 5y ago
      Which in practice just means that the land didn't get a chance to appreciate by 20-30k. Houses cost every spare penny that we can save up to pay for them. Whether the pennies end up going into raw materials, or speculators doesn't really matter to the end purchaser. If labour and materials became free tomorrow, the cost of housing would remain unchanged, but the cost of land would rise to pick up the slack.
      - rhodozelia 5y ago
        Thank you for a very insightful comment. Houses are worth what people will pay for them, and when you can borrow money so cheaply they are worth a lot! What else are you going to buy? Having a nice place where you spend a lot of time that is near things you do be it work or recreation is worth as much as you can afford to pay - a house in a good location saves precious minutes of your life!
        deleted 5y ago
        [deleted]
pmastela 5y ago
Am I completely out of the loop or is this sarcasm? I thought the lumber costs were skyrocketing and housing prices were too. At least in the US, I thought this was the case.
- eberkund 5y ago
  Sarcasm, the exact opposite is true.
- MattGaiser 5y ago
  Not OP, but it is sarcasm. Lumber is at record prices. https://tradingeconomics.com/commodity/lumber https://tradingeconomics.com/commodity/lumber
  - wyldfire 5y ago
    Wow, history goes back to 1979. Roughly same 200-600 USD envelope until 2020.
    - bobthepanda 5y ago
      Are those 2021 dollars? The 1979 value of $200 would be $735 today.
- rhinoceraptor 5y ago
  Sheathing plywood and OSB are now basically as expensive as cabinet grade hardwood plywood. It's insane.
  - rwcarlsen 5y ago
    In many places cabinet grade hardwood plywood is cheaper! I could sheath my roof and house with 3/4" cabinet grade maple for the same price as "cheap" ugly OSB.
happytoexplain 5y ago
Dry sarcasm is ambiguous online.
- belval 5y ago
  Normally I would agree with you but lumber prices have been so high in the last few months I'd say the sarcasm is warranted.

Mountain_Skies 5y ago

This is a weird decision given that the eviction moratorium has been overturned by the courts and millions are going to be facing housing difficulties over the rest of the year as those evictions start to happen. Both the sales and rental markets are very low on supply right now. Increasing housing costs through higher building expenses seems like it will end up being a political land mine.

deleted 5y ago

[deleted]

RoadieRoller 5y ago

(I am not a US citizen, but visited many times) Why not build houses using concrete/cement? Poor Asian countries have been building houses for decades using concrete and less maintenance. No, it is not about weather. Concrete can be easily used in Southern US states where winter is less than a month or no snow at all. At least the structure can be concrete and the walls be wood or drywall. I think it is the wood mafia trying to make a living out of enforcing city codes to use only lumber for houses.

MattGaiser 5y ago
Americans tend to want very large homes by global standards and lumber is (or at least was) cheaper.
clusterfish 5y ago
It's more expensive and has a terrible environmental impact. Forestry at least can be sustainable if done right
spideymans 5y ago
Environmental concerns are one reason. Concrete is more environmentally intensive than lumber, and the construction industry already accounts for a significant portion (about 10%) of global GHG emissions. We should be moving away from using concrete when more sustainable alternatives exist.
hwbehrens 5y ago
It varies between regions, but in general, building with wood is significantly faster and less expensive than using concrete. They are also easier to remodel, extend, and ultimately demolish, but these are secondary reasons. Some areas, such as regions of Florida or Arizona for example, have substantial historical housing stock made from concrete. However, the majority of new construction is wood for the reasons stated above. There are not (to my knowledge) any building codes that prohibit concrete construction for residential.
- gresrun 5y ago

likecarter 5y ago

There is a glut of trees in the U.S., not processed lumber. Not sure how this helps the landowner lobby pushing for this tariff.

kokanator 5y ago
It helps the large timber land holders. ( weyerhaeuser, Fraser, GP and their friends/competitors )

kokanator 5y ago

Policy bankrupts large swaths of the logging industry. We create restrictions that substantially increase the cost of harvesting timber on public forest lands ( and add fuel load btw ). This has left major land owners as our primary source of timber ( read monopolistic ). Allow these timber companies to ship our timber overseas to create an intentional artificial shortage ( yes it is documented ). I know, let's solve this problem by adding tariffs on timber from Canada who openly supports their timber industry. Alternatively, you could fix the problems at home! ( Might be a little tainted as I grew up when the spotted owl shutdown the living for entire towns in Washington and our fathers had to go to Alaska and Canada for years to make money to send home. )

lhorie 5y ago
> Allow these timber companies to ship our timber overseas to create an intentional artificial shortage ( yes it is documented ). Am I understanding right that this would mean US would be incentivized to not export lumber (since domestic demand would grow in response to the increase in canadian lumber prices), and conversely, Canada would just fill the export gap left open by the US, leaving Canada in a stronger, more diversified trade position and the US in a worse, nationalist position? Or am I missing something?
- kokanator 5y ago
  I am having a difficult time wading through current "shortage" links to find the original information. However, here is the gist. - The inventory of raw timber ( the type you see in log yards ) has grown too large. - Lumber mills are lowering the amount they will pay for raw timber as a result. As well as the rest of the end lumber market. - This causes timber companies profit per foot to drop. - The timber companies decide to "export" raw timber overseas at a loss. - This in turn raises the rate the Lumber mills and Lumber consumers pay out pacing the original loss on "exported" timber. It is important to also note, most of this timber came from public lands to begin with. The overall point is OUR resources were exported at a loss so OUR prices would increase. Forests are part of the wealth of our country. Letting a timber company send it overseas to increase domestic timber prices should be illegal.

btbuildem 5y ago

As a Canadian - awesome! (Given that I understand the consequences correctly, that is.) The incredible demand, coupled with supply chain troubles, has driven up the price of lumber here nearly 300% A 8' 2x4 was $2.95 this time last year, today it's $10. I hope this cools the exports of lumber from Canada, and we see the prices move back towards a sane level.

partiallypro 5y ago
This would actually drive up the price even more though? Demand for lumber is pretty inelastic.
- enragedcacti 5y ago
  In the US it will, in Canada it should go down given that exports to the US will slow and thus internal supply will increase.
nightowl_games 5y ago
As a Canadian, I disagree. The US has unfortunately been shafting Canada on softwood lumber for decades[1]. Your implying that Canadian logging companies are just going to sell cheaper lumber to Canadians. I would say that that's just one piece of the picture. Canada's economy is based upon selling resources to the United States (mostly oil). The United States historically has abused their monopoly on buying Canadian resources. Since the US is a much larger and stronger country, the US essentially sets the rules. If American companies stop buying Canadian lumber, it will be a net negative for Canada. We have a massive deficit due to our massive covid stimulus spending. We need American money more than they need Canadian lumber. 1: https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_softwood_lumber_dispute https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_s...
- Teever 5y ago
  > Canada's economy is based upon selling resources to the United States (mostly oil). Oil & Gas accounts for less than 10% of the Canadian economy.

tengbretson 5y ago

If this actually works to shore up the domestic end-to-end supply chain for lumber and lumber products so that we don't have to rely on growing and harvesting trees here, sending them across the world for processing, just to ship them back as plywood and other wood products then great! Based on what products this is targeting and the current domestic labor situation here it appears that this will absolutely not be the case.

clusterfish 5y ago

Canadians: meet the new boss, same as the old boss. Trump's steel tariffs are still in place too.

gher-shyu3i 5y ago
If Trump ordered this it would be all over the news. The double standards are astounding.
- peeters 5y ago
  This was all over the news. That said nobody in Canada was expecting Biden to be less protectionist, it was clear he was cut from the same cloth as Trump as far as his thoughts on globalization and allies went.
  - nightowl_games 5y ago
    I dont think the historical arguments about Globalization hold up in a post-covid world. We are seeing a massive CPU and GPU shortage. TSMC is a nexus of world trade. We saw a massive Suez canal blockage. The merits of locally produced goods are far more apparent now than ever before. We are in a new age.
    - peeters 5y ago
      We also haven't had a world war in 76 years. I'll take an occassional shortage on non-critical goods over a major war every 20 years.
    - Matticus_Rex 5y ago
      Given the estimated gains of globalization just in economic terms (to say nothing of worldwide economic stability in most situations), which are in the 14-figure range, there's significant doubt here. Yes, there's likely room for things to be made in more than one place in many instances. But global comparative advantage is still the single greatest contributor to rises in global standards of living. Billions of people have been raised from extreme poverty due to globalization in the last few decades. Those shortages we occasionally get are market opportunities that will encourage new market entrants. We don't need to attack globalism to get redundant production.

nafizh 5y ago

Incredible. Instead of putting tariffs on Chinese cheap stuff that most people can get by without, US is putting tariff on one of the main exports of its closest allies.

hahahasure 5y ago
Both were painful to US citizens. No reason to paint team Red or Blue was better or worse.
nightowl_games 5y ago
You should see what the Koch brothers have down to our oil industry and politics!
- Matticus_Rex 5y ago
  The Koch brothers actually are against all or nearly all tariffs, incidentally (like most economists).
  - yostrovs 5y ago
    It is indeed amusing to see people accused of being the very opposite of what they are. The Kochs, if anything, are against limitations on free trade.
sudosysgen 5y ago
Well yeah, the US has been doing that forever. There is an economic incentive to fuck over Canada, and none to stop enjoying cheap labour and efficient supply chains from China. The US pretty much only does things when it is in it's interest, and if that happens to be a good thing it will be spun as a principled decision but that's generally a coincidence.

hourislate 5y ago

It's interesting who owns a lot of the saw mills in Canada. https://www.lesprom.com/en/news/13_biggest_lumber_companies_increase_production_by_2_3_to_34_2_billion_board_feet_in_2017_82957/ https://www.lesprom.com/en/news/13_biggest_lumber_companies_... *Four of the top ten largest firms are based in B.C. (West Fraser, Canfor, Interfor and Tolko), with the first three holding substantial sawmilling assets in the U.S.* So it seems these Corps own assets on both sides of the border and it isn't clear how these tariffs help them. From what I understand (possibly wrong,) there has even been more consolidation in the Lumber Industry in the last couple of years and like 5 Companies own all the Sawmills on both sides of the border.

ska 5y ago
> So it seems these Corps own assets on both sides of the border and it isn't clear how these tariffs help them Maybe that's looking at it the wrong way; tariffs and trade battles are going to happen anyway, if I have operations on both sides of a border in a way I'm hedged against their impact.

joejerryronnie 5y ago

This is simply a response to the new Canadian digital tax.

hahahasure 5y ago

I can't understand why both political parties are so bad for the 100%. Rich to poor, it seems everyone is constantly losing. Who wins? A lumber yard owner? The employees need to buy homes, so they lose. Are we really doing these anti market policies for the benefit of less than 12 people.

belval 5y ago

I can't say that I understand that move since the price of lumber is at ATH but as a Canadian if it reduces the price for wood (and housing) I am all for it.

jypepin 5y ago

Very surprised to see some arguments in the article saying lumber only make 4% of construction prices. I'd love to know what type of construction they're looking at. We're currently in the process of building a house and current lumber prices (because of covid mainly) are definitely impacting costs, to the point that it's one of the first thing that both our architect, and then builders mentioned. Everybody involved in the trade have mentioned the idea of waiting an extra year before building, mostly because of lumber prices.

Beached 5y ago
in a traditional 2x4 construction stick built home, the amount of cost wood has is very low, iiiiifffff you exclude premium wood products like hardwood flooring, cabinets, trim, etc. I believe the 4% estimate is fairly accurate for traditional rough in.

glonq 5y ago

Countdown to WTO ruling in Canada's favor [again]...

Robotbeat 5y ago

This is bad. I thought the tariff would’ve been reversed given the soaring lumber price and inflation fears.

dukeofdoom 5y ago

Maybe China will step up and take in the extra lumber. Canada increasingly relies on exports to China anyway. Canadians are holding joint military exercises with them. And Chinese investors are buying up prime property in Canada. Nothing wrong with it. Just the way the cookie crumbles.

908B64B197 5y ago
> Nothing wrong with it. Pierre Trudeau was the one who opened trade with China. He was also a close personal friend of Fidel Castro. Interesting how the son is following in the footsteps toward authoritarianism.

hedora 5y ago

For reference, the base price/square foot of new construction increased 20% when Trump introduced these tariffs. He also tariffed Chinese concrete at the same time. The reason it went up so much is (like any other business), contractors and manufacturers need to preserve their profit margins, multiplying the impact of the tariffs for new home builders. It also allowed domestic producers to hike their prices (which they did). Also, the tariffs caused many substitutions of slightly more expensive (but now cheaper) materials, leading to bizarre shortages and more price hikes. Then, covid hit and now this. It’s a complete disaster. Is the department of commerce actively trying to get Trump back in in 2024, or do they just like inflation, homelessness and high interest rates?

imtringued 5y ago
Yeah, it really is weird, there is nothing wrong with demand increasing and everyone starting to build housing, however there is something very wrong about making it harder to build houses than absolutely necessary. Those tariffs made sense in 2018 but they don't make sense in 2021. Everyone considers USA an export destination where every country dumps their products, that means some degree of unemployment is unavoidable because these countries run trade surpluses on purpose and they won't stop them. Right now unemployment is on a heavy downward trend, which means there is no need for protectionism anymore.

Haemm0r 5y ago

Currently those tariffs have a big impact on the markets in Germany, Austria and others in Europe too. According to the media the US is buying wood at large [e.g. 1] in combo with local companies trying to stock up prices for wooden build home increased 20-30% in the region. If you talk to local carpenters (Austria) lead times are a roulette game and prices change daily. The post-covid effect may complicate things furthermore. [1] https://www.bloomberg.com/news/articles/2021-05-12/u-s-lumber-importers-are-driving-buying-mania-for-european-wood https://www.bloomberg.com/news/articles/2021-05-12/u-s-lumbe...

deepserket 5y ago

$inflation here we gooooo$