The National Lumber and Building Material Dealers Association (NLBMDA) wrote a letter to president Donald Trump seeking assistance addressing soaring lumber prices. In its letter, the NLBMDA said lumber prices and the rate of increase, particularly since mid-April, are not sustainable.
The NLBMDA said the 80% increase in lumber prices since April have had a dramatic effect on the LBM industry, residential construction, and the larger economy. While acknowledging that the coronavirus (COVID-19) pandemic has played a role in the price increases, the association requested the Trump administration take steps to alleviate problems related to high lumber prices. Jonathan Paine, the CEO and president of the NLBMDA, said the administration can play a “vital role” in boosting confidence for domestic producers and ensure state and local action does not interfere with lumber production.
“[The] NLBMDA is urging the administration to return to the negotiating table to enact a new Softwood Lumber Agreement (SLA),” Paine wrote in the letter. “With the pandemic’s effects on lumber mills and their ability to operate at capacity, the [imported lumber] tariff is even more severely impacting prices for consumers. The administration can help businesses and the economy by getting a new SLA in place with Canada.”
Last week, the World Trade Organization (WTO) ruled against the United States regarding countervailing duties imposed on Canadian softwood lumber exports. The WTO ruled the duties put in place to help balance Canadian subsidies were in violation of global trading rules because the U.S. did not provide evidence that prices paid by Canadian firms for timber were artificially low. U.S. Trade Representative Robert Lighthizer called the WTO report “flawed” and the U.S. is permitted to appeal the ruling within 60 days of the initial WTO report.
A recent report from the National Association of Home Builders (NAHB) estimates the lumber price spikes since April have contributed approximately $16,000 to the cost of a new home. The NAHB has also submitted letters to Commerce Secretary Wilbur Ross, Lighthizer, and president Trump, calling for officials to re-engage with Canadian officials to reach a long-term agreement on softwood lumber and take steps to address high lumber prices.
