The price of Canadian lumber imported into the United States and widely used for residential construction – including the construction of HUD Code manufactured homes – will increase as a result of a tariff levied on those imports by the Trump Administration.
After threatening to impose trade duties on goods imported from China and Mexico during the presidential election campaign in 2016, the Administration announced its first new tariff on imported goods in a statement issued by Commerce Secretary Wilbur Ross on April 24, 2017. Under the announced plan, tariffs ranging from 3 to 24% (with an average of 19.9%) would be imposed on five specific Canadian lumber companies, identified as: West Fraser Mills, Tolko Marketing and Sales, J.D. Irving, Canfor Corporation and Resolute FP Canada.
The new tariffs were authorized by the Trump Administration based on claims by U.S. lumber companies that Canadian firms exporting lumber to the United States are provided with unfair subsidies by the Canadian government. According to press reports, total Canadian exports of softwood lumber to the United States were valued at $5.6 billion in 2016.
While the imposition of the Canadian lumber tariff caps a period of serious economic uncertainty for the residential construction industry, which has seen a more than 20% surge in wood prices since the November 2016 presidential election fueled by speculation that penalties would increase costs even more, increases in home prices driven by higher supply costs for basic raw materials, such as wood, as always, will have a magnified impact for the highly-price sensitive manufactured housing market.
MHARR will carefully monitor further developments affecting this matter. As a practical matter, though, it must be stressed that the entire subject of tariffs, free trade and fair trade has political-economic aspects and undercurrents which extend far beyond the realm of the manufactured housing industry.