US lumber market chaos looming over Trump tariffs

Friday 17 Jan 2025

 
With President-elect Trump set to take over the Oval Office on January 20, the Canadian lumber industry looks to be taking action. As Trump has threatened 25% import tariffs on all goods from Canada and Mexico (as well as 60% tariffs on China imports), Canadian lumber companies are going on the offensive by proposing 25% increases in lumber effective if and when the tariffs are implemented.

Whether this is simply aggressive posturing and bullying by Trump to get action from Canada and Mexico – and it looks like it has definitely got the attention of Canadian politicians – or it is something that he will go through with to prove his point, exporters and buyers need to protect their businesses with short-term strategies.

A number of Canadian lumber companies are now advising customers that they will add 25% to lumber exports to the US when the tariff is announced. With Canadian mills already paying an average of 14.4% import duties on US shipments, they have no alternative but to increase prices by the 25% to cover the potential tariff.

A Linkedin post by Nic Wilson, CEO of the Denver Mass Timber Group Summit, provided his view of recent market uncertainties. He reports on January 9: “West Fraser… sent a blanket email statement out last night. That said, if Trump signs a +25% tariff (to the existing import duty already in place), then any lumber that isn’t already rolling on a rail into your yard will be subject to the added expense.” He indicates that “multiple big Canadian mills sent out the same public announcement.”

As a wholesale lumber purchaser/trader, Mr. Wilson’s view is that, “the market will panic buy to cover their February and March inventories. It’s the customer’s insurance policy. Legitimately, people are gambling right now, rolling the dice because some of them have been caught with their pants down, leaving their lumber in the sawmill’s yard too long. Now people are forced to panic ship, based on a “what if” scenario. The crazy part is, we do not actually know if Trump will or will not add the tariff. It is all a wild ass speculation.”

He believes that this “will trigger a panic buy the next few weeks, causing runaway prices. This is textbook… ‘Selling the rumor and buying the facts.’"

This initial market reactions come after Trump’s earlier comments this week that: “We don’t need their lumber. We have massive fields of lumber. We don’t need their lumber,” said Trump. “We have to unrestrict them, because stupid people put, you know, restrictions on – but I can do that with an executive order. We don’t need anything they have (…referring also to cars and dairy, but not oil).”

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Source: Russ Taylor Global


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