With President-elect Trump set to take over the Oval Office on January 20, the Canadian lumber industry looks to be taking action… advising customers that they will add 25% to lumber exports to the US when the tariff is announced. With Canadian mills already paying an average of 14.4% import duties on US shipments, they have no alternative but to increase prices by the 25% to cover the potential tariff. Nic Wilson, CEO of the Denver Mass Timber Group Summit reports that… “multiple big Canadian mills sent out the same public announcement.” As a wholesale lumber purchaser/trader, Mr. Wilson’s view is that “the market will panic buy to cover their February and March inventories. Legitimately people are gambling right now. …The crazy part is, we do not actually know if Trump will or will not add the tariff. It is all a wild ass speculation. …This is textbook… Selling the rumor and buying the facts.”

This market reaction comes after Trump’s earlier comments this week that: “We don’t need their lumber. We have massive fields of lumber. We have to unrestrict them, because stupid people put, you know, restrictions on.” Of course, this is another Trump mis-truth – in more ways than one. …He does not seem to understand that you need capital (harvesting machines, logging trucks) and skilled labour to ramp up any log harvests. So, unrealistic in the short term. And then you need sawmilling capacity which could be ramped somewhat, but US mills are already running at around 85% of capacity. …So, waiting to see what Trump will do with 25% tariffs has already spooked the markets. Let us see what Trump’s strategy really is, as the tariffs will backfire very quickly if implemented, causing higher prices and inflation and the potential of shortages and job losses. Interesting times!