Last November, the U.S. Department of Commerce under President Trump announced an average of 21 percent import duties on Canadian timber products entering the U.S. The announcement was greeted with mixed reactions within the construction industry; builders claimed that the tariffs would increase the cost of construction, and American suppliers argued that the domestic timber industry would benefit, expand, and keep wood prices low. Single-family home construction in the U.S. relies heavily on Canadian softwood for roofing and framing. In 2017, Canadian lumber yards supplied 28 percent of the U.S. softwood lumber market, and home builders have been the first to raise concerns about the new duties, which were in effect by January. The National Association of Home Builders (NAHB) claims that the imposed tariffs have added approximately $9,000 to the cost of single-family homes and up to $3,000 on multi-family homes. The NAHB doesn’t believe U.S. domestic production is capable of meeting the current market demand and that the tariffs only hurt native manufactures by forcing them to increase their lumber prices. The NAHB is calling for the Trump administration to resume talks with Canada to secure a more mutually beneficial long-term agreement. David Logan, director of tax and trade policy analysis at the NAHB, says that historically, the U.S. lumber field has never been able to support rapid housing growth. “Buyers are still buying from the distributors they’ve always sourced from despite the tariffs,” he said. “Domestic lumber production has increased marginally in the last year, but it’s not kept up with the housing demand in terms of percentages, so it’s hard to say that we’re meeting the challenge. This has always been the case. We can’t meet that need...not even close.” Logan also argued that larger lumber companies in the U.S. are profiting unfairly from the deal, citing the Seattle-based Weyerhaeuser, which owns 12.4 million acres of forest in the U.S. alone and manages 14 million acres in Canada, as well as West Fraser, a Vancouver-based company that operates 48 mills across both countries. The NAHB claims that these companies are able to reap the benefits of both markets under the current trade agreement and likely won’t be affected if things change again. “We say over and over again that we need predictable and stable supply. That means using Canadian lumber,” Logan said. “Diversification of operations in the biggest mills on both sides of the border has really hampered any progress towards talking further about this issue because they’re able to increase production and do well. Prices have been so high there’s not really room for anyone but the big players to have a seat at the table, whether they’re Canadian or American.” The U.S. Lumber Coalition (USLC) rejects these claims. “Since the duties were implemented," the USLC wrote in a statement last week, "U.S. lumber shipments have increased by about 1.4 billion board feet, roughly filling the gap left by the decrease of Canadian imports. U.S. companies continue to invest in expanding their production capabilities to mill lumber from American trees by American workers to build American homes.” Pleasant River Lumber, a small milling company based in Maine, isn’t experiencing the negative side effects that the NAHB claims is coming out of the current tariffs on timber. In fact, the company is on track to complete a $20 million expansion at two of its four sawmills in the next 18 months. As part of the USLC, Pleasant River Lumber sources 95 percent of its lumber within the state of Maine and takes a bit from New Hampshire and Canada as well. Owner Jason Brochu is pleased with the country’s newfound focus on local production and plans to take advantage of it. “Increased demand due to forest fires and hurricanes in other states, spiked prices from the duties, heightened transportation costs, and a strong housing market all factor in to establish a level playing field for lumber production in the U.S. right now,” said Brochu. “We can’t compete against the government or any larger mills without things being equal.” Pleasant River Lumber is capitalizing on the growing lumber market by adding 50 percent more capacity to its production facilities and hiring 40 new employees as quickly as possible. They plan to boost production of their dimensional lumber from 200 million to 300 million board feet annually with the upgraded equipment. More importantly, they’re investing in their framing mills to address the increased demand within the housing market. “We believe we’re pretty typical of most mills in the country at this time,” Brochu said. “Most mills in Maine specifically are adding shifts or putting more money into mills to increase volume. We’re confident that the duties protect our rights as producers in the U.S. and we feel like the laws are working the way they should.” Brochu also emphasized how “relatively insignificant” framing lumber is in housing construction. USLC said the same thing stating that lumber makes up only 2 percent of the cost of a new home—which in 2018 stands at $368,500. Framing lumber isn’t the only wood material that’s used to construct new homes. Plywood, which has zero duties imposed on it, flooring, and other timber products are also increasing in price. New York-based specialty wood-product manufacturer Hudson Company said the niche wood market has been affected as well. Two of its most popular reclaimed-wood products, both of which feature Canadian imported lumber, have both been impacted dramatically, says owner Jamie Hammel. Sales of silver pine siding are down by 60 percent, while hand-hewn beams are down 40 percent. “The reason our business is not down by 60 percent,” he said, “is because we sell other things. But we've had to limit the amount of volume we import because of the tariffs and we’ve had to diversify our product line to adjust and will continue to do. We’ve had to source more products locally which I guess was the administration’s goal.” The timber tariffs against Canada were among the first official duties placed on another country by the U.S. government since Trump took office. In the ten years since the Softwood Lumber Agreement (SLA) was established in 2006, the U.S. Commerce Department has allowed Canadian companies to sell lumber to the U.S. market at subsidized prices, lifting previously countervailing and anti-dumping duties as long as prices stayed above a certain figure. The SLA expired in 2015 and since then both countries have been unable to negotiate a new deal. On behalf of the NAHB, Logan said that his organization doesn't foresee a new Canada-U.S. deal happening in the near future. “We don’t think the dialogue will reopen any time soon as long as the North American Free Trade Agreement negotiations are ongoing. If history repeats itself...the last time this happened it took around 5 years to settle,” he said referring to the original SLA. “Hopefully I’m wrong and this is done very quickly. Until then, prices will maybe get a bit higher, but volatility will certainly increase.”
Posts tagged with "Lumber":
The Unites States has picked a fight with one of its most peaceful trading partners, this time over a popular construction material. Yesterday the U.S. announced it will impose duties on imported Canadian softwood lumber. Canada, predictably, is not happy with the move. The U.S. Commerce Department said it will put in place "preliminary anti-subsidy duties" of around 20 percent, a move that will impact $5.66 billion in imports, Reuters reported. The decision comes as the U.S., Canada, and Mexico gear up to renegotiate North American Free Trade Agreement (NAFTA) later this summer. The U.S. said that Canada's West Fraser Mills would pay 24.12 percent, the highest duty rate, while J.D. Irving Ltd would pay the lowest (3.02 percent). Aside from a few other major producers, all Canadian timber companies will pay a 19.88 percent duty. This is only the latest point of contention in a decades-long dispute between the two countries over lumber. The U.S. government claims that Canadian timber producers, who harvest the wood on government land, have an unfair trade advantage over American timber producers, who typically get their wood from privately-owned property. In a statement, Canadian Natural Resources Minister Jim Carr and Foreign Minister Chrystia Freeland characterized the Commerce Department's claims as "baseless and unfounded." Canada said it will make moves to protect its lumber in court. All told, the duties would add up to about $1 billion annually, but could cause construction costs in the U.S. to rise. Wood yew like to learn more? Construction Dive has insight into what the move will mean for the AEC industry. The New York Times reports that a study by the National Association of Home Builders estimates that a tariff of 15 percent could raise new home prices by around 4 percent, while Bloomberg News gives greater context to the history of the hard-headed history of the softwood lumber dispute.
An expanse of sustainable timber just clinched the Chicago Architecture Biennial’s Lakefront Kiosk Competition
Officials with the Chicago Architecture Biennial today announced the winners of the Lakefront Kiosk Competition, choosing a team whose stated goal was “to build the largest flat wood roof possible.” Dubbed Chicago Horizon, the design is by Rhode Island–based Ultramoderne, a collaboration between architects Yasmin Vobis and Aaron Forrest and structural engineer Brett Schneider. Their pavilion uses cross-laminated timber, a new lumber product that some structural engineers call carbon-negative for its ability to displace virgin steel and concrete while sequester the greenhouse gas carbon dioxide during its growth. Ultramoderne's long, flat roof “aims to provide an excess of public space for the Architecture Biennial and Chicago beach-goers,” according to the project description. Their design rose above 420 other entries from designers in more than 40 countries, and will receive a $10,000 honorarium, as well as a $75,000 production budget to realize the kiosk. BP is providing those funds as part of a $2.5 million grant to the inaugural biennial. Three teams—Lekker Architects, Tru Architekten, and Kelley, Palider, Paros—were finalists for the top honor. Fala Atelier, Kollectiv Atelier, and Guillame Mazars all received an honorable mention. The Biennial has posted a selection of submissions to the Lakefront Kiosk Competition on its Pinterest page.
After the biennial, Chicago Horizon "will find a permanent home in Spring 2016, operating as a food and beverage vendor, as well as a new public space along the lakefront.During the Biennial three other kiosks will be installed along the lakefront. Details on those are due to be announced next week, but here are the preliminary project descriptions:
The Cent Pavilion, designed by Pezo von Ellrichshausen in collaboration with the Illinois Institute of Technology, is a forty-foot tower meant to convey silent and convoluted simplicity. Rock, the kiosk designed by Kunlé Adeyemi in collaboration with the School of the Art Institute of Chicago is a pop-up pavilion a public sculpture composed from the raw and historic limestone blocks that once protected the city’s shoreline. Summer Vault, designed by Paul Andersen of Independent Architecture and Paul Preissner of Paul Preissner Architects, in collaboration with the University of Illinois, Chicago, is a lakefront kiosk that consists of basic geometric shapes combined to create a freestanding hangout within the park.
We don't usually track our emails from the National Hardwood Lumber Association (NHLA) very carefully. But today we learned via one of their offerings that Sarah Palin will be the keynote speaker at the NHLA's annual convention, which will be held from October 13-16 in Vancouver. So what does Palin have to do with an organization formed to "establish a uniform system of grading rules for the measurement and inspection of hardwood lumber?" Here's what they say: “The hardwood industry has been successfully self-regulated for more than 110 years. Governor Palin supports a free enterprise system with limited government involvement and understands that industries, such as ours are a great example of America’s pioneering spirit. We are pleased and honored to welcome her as Keynote Speaker.” There you have it. God Bless America.