Days after the U.S. Commerce Department reduced duties on shipments of Canadian lumber into the United States, the National Association of Home Builders (NAHB) said more cuts are needed.
Last week the Commerce Department agreed to reduce anti-subsidy and anti-dumping duty rates from about 20% to 8.99%.
The move arrives after lumber prices experienced extreme price volatility in 2020, including reaching record highs. Compounded with shortages on some fronts, the rise in prices piling on to the final costs in new home construction.
Citing the Random Lengths Framing Composite Price, the NAHB said that lumber prices have declined but remain more than 60% above the mid-April price. NAHB representatives say more action is needed to help reduce home prices.
“The Commerce Department’s action to reduce duties from more than 20% to 9% on softwood lumber shipments from Canada into the U.S. is a positive development, but more needs to be done,” said NAHB Chairman Chuck Fowke. “Tariffs have contributed to unprecedented price volatility in the lumber market in 2020, leading to upward pressure on prices and harming housing affordability for American consumers. The U.S. needs to work with Canada to end the tariffs and achieve a long-term, stable solution in lumber trade that provides for a consistent and fairly priced supply of lumber.
The NAHB says lumber prices continues to put pressure on home builders and home costs.
According to the NAHB, lower tariffs would mitigate uncertainty and associated volatility that has plagued the marketplace, which could help ease upward price pressure on lumber prices.
Another positive development is that housing construction and new home sales have moved forward at a robust pace in recent months as lumber prices have receded from unprecedented highs.
Lumber prices peaked above $950 per thousand board feet in September and are now down to roughly $560 per thousand board feet – still at an extremely high historical level.
The NAHB said that it continues to work on all fronts to find solutions that will ensure a lasting and stable supply of lumber for the home building industry at a competitive price.
The National Lumber and Building Material Dealers Association (NLBMDA) said that it “welcomes” the decision by the Department of Commerce and views it as a step in the right direction in trade relations between the U.S. and Canada.
In the meantime, the NLBMDA said that it will continue to lobby the Trump Administration and the incoming Biden Administration in support of a long-term softwood lumber agreement with Canada.
According to the NLBMDA, a new agreement would bring stability and predictability to the pricing and availability of softwood lumber.