An ongoing trade dispute with Canada and the COVID-19 pandemic are driving up the cost of softwood lumber in the U.S.
Lumber mills in the Pacific Northwest have cut production amid coronavirus lockdowns, and contractors have turned to Canada for wood. Canadian lumber producers are paying average tariffs of more than 20% on timber shipments to the U.S. This results in an average price increase of about 8% in the U.S.
The Trump administration applied tariffs on Canadian softwood lumber in 2017, asserting that the industry is unfairly subsidized by the government north of the border. It is unlikely that this trade clash will be resolved this year.
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