B.C.’s softwood lumber industry is attempting to come to terms with the potential impact of U.S. President Donald Trump’s tariffs.
The U.S. Department of Commerce issued a preliminary anti-dumping rate of 20.07 per cent, up from 7.66 per cent set three years ago, which is in addition to countervailing duties of 6.74 per cent.
That brings the total for potential levies to almost 27 per cent, and with the addition of the 25 per cent tariffs that went into effect on Tuesday, that means the total tariffs would be 52 per cent in terms of the combined duties and tariffs later this year.
“It isn’t good news for us,” Kurt Niquidet, president of the BC Lumber Trade Council, told Global News.
“The softwood lumber industry, as well as the broader forest sector, is quite reliant on the U.S.
“For softwood lumber production, about 75 per cent of our exports are destined to the U.S., and for the U.S., there’s going to be impacts on them as well.”
Niquidet said B.C. does not really import forest products from the U.S., but a lot of product is shipped to the United States.
He added that for U.S. consumers, they rely on Canadian forest products, as they can supply about 70 per cent of demand and the vast majority of the remaining 30 per cent of products come from Canada.
“It’s going to make our products more expensive, but there’s limited opportunities for them to actually supply more within the U.S.”
Andy Riley, CEO of Chilliwack-based Riley Lumber, told Global News that even the uncertainty leading up to the tariff deadline was very stressful.
“Firstly, the uncertainty doesn’t make it easy to plan anything,” he said.
“Our customers at this time of year are trying to buy their products for March, April, May, June, which is the biggest part of the cedar season. We’re a Western Red Cedar manufacturer and plus the fact that the value of our product is so high that you talk about a 14.5 per cent duty that we pay now on an average price of $4,500 per 1,000 boards, that takes the price up even more, and now today, we’ve got a 25 per cent additional tariff on top of that.”
Riley said their products that were already priced high in December are going to be even more expensive now.
“You have to sort of consider what’s going to happen in the United States in terms of their consumers,” he added.
“So for instance, if you’re talking about framing lumber, and you’re going to put a tariff on lumber that’s worth $800, you’re going to put 25 per cent on all of a sudden it’s worth $1,100.
“The U.S. producers are not going to continue to sell at $800, they’re going to raise their price to $1,100 so they’re going to take that 25 per cent, which we’re paying at the border, and add it to their price. So at the end, the poor guy trying to rebuild his house in Pacific Palisades in California, he’s going to pay more for his lumber than he should be.”
Riley added that it’s frustrating for everyone because tariffs and retaliatory tariffs increase the price for everyone.
“Eventually we’re going to get to the point where say this doesn’t really make much sense, and hopefully we can get back to the system we’ve had before.”