In post tariff world, lumber prices higher, steady

With a tariff on Canadian lumber in place for the past month, domestic prices for lumber have risen. The price jump actually came late in the winter, in anticipation of the tariff, lumber experts have noted. Since then, prices have leveled off a bit.

The tariff, which amounted to roughly 20 percent for most Canadian lumber producers, boosted prices $30 to $40 per thousand board feet, noted F.H. Stoltze Land and Lumber general manager Chuck Roady.

“It definitely helped the market and kept it stabilized,” he said last week.

Stoltze is one of the few large family-owned mills left in Montana.

In January, the International Trade Commission found that Canadian softwood lumber products dumped on the U.S. market from Canada materially injured American producers. The commission made its finding on a Friday.

That next Monday, the lumber markets rose substantially, Roady noted.

But Roady said what’s really needed is a long-term agreement with the Canadians. He said he hoped the tariff would bring the Canadians to the negotiating table.

“I don’t like the animosity between the two countries at all,” he said, noting he’s been working with Canada companies for more than 30 years.

Random Lengths, an Oregon publication that tracks lumber markets and news, gauges lumber markets through a composite price that is a weighted average of 15 key framing lumber prices. Last year, the price averaged about $346 a thousand board feet.

Today, it’s about $420 a thousand, which is pretty high from a historical standpoint, noted publisher Jon Anderson.

The low came in 2009, when the housing market all but crashed and the composite, at one point, dropped below $200.

Montana Sen. Jon Tester said he, too, favored the tariff, but he also wanted to see a long-term solution as well.

That renegotiation could be coming sooner rather than later. The Trump administration has promised to renegotiate the North American Free Trade Agreement — a move that’s supported by the U.S. Lumber Coalition.

The Coalition last week came out in opposition of one section of the agreement in particular — the Chapter 19 dispute settlement mechanism.

“NAFTA Chapter 19’s ad hoc bi-national panels currently replace independent U.S. court review of U.S. countervailing duties and anti-dumping duties imposed to offset the harm from unfair trade, thus handing over the U.S.’s sovereign right to implement its laws to panels which are partially made up of foreign nationals, who may represent their own national and professional interests,” the coalition said a release last week. “Under Chapter 19, unfair trade has been accepted rather than disciplined, disallowing U.S. industries a fair chance to compete and costing U.S. workers their jobs. The Chapter 19 system must be eliminated from the NAFTA.”