Kelly McCloskey
Robert McKellar
Over the past two years, Tree Frog has periodically turned to political risk consultant Robert McKellar to help readers better understand the geopolitical forces increasingly shaping the business environment in which the North American forest sector operates. In his feature Trump’s Second Term and Political Risk in the Canadian Forest Sector, Robert explored how changing politics, government policy and international relations can create both risks and opportunities for forest companies. In doing so, he also introduced readers to the discipline of political risk management—a practical framework for anticipating and responding to an increasingly uncertain world.
Robert’s earlier articles generated thoughtful feedback and reinforced a common observation: the pace of global change is becoming increasingly difficult to follow. Every day seems to bring another headline about tariffs, trade disputes, wars, sanctions, shipping disruptions, energy prices, artificial intelligence, or some other geopolitical development. For many of us, the challenge is no longer keeping up with the news—it’s deciding what actually deserves our attention. Which developments are likely to influence markets, trade and investment in the forest sector? Which simply warrant monitoring? And which are little more than background noise? Those questions are central to political risk management. They are also questions we increasingly hear from readers trying to make sense of a relentless news cycle and what it means for their businesses and organizations.
In this article, Robert steps back from the daily headlines to explain how political risk professionals approach that challenge. His answer offers a practical framework for separating signal from noise—and a useful way of thinking about the global forces increasingly shaping the future of the forest sector.
China will be front and centre at the renegotiations of the USMCA on trade despite not having a seat at the bargaining table. …With the USMCA now subject to annual reviews, the US is using the continuing trade talks to put pressure on Canada and Mexico to collaborate with its efforts to undercut China. Washington is alleging that China is exploiting loopholes in the USMCA to avoid US tariffs on its exports by using Mexico and Canada to gain back-door entry to the US market. But there is a difference between blatant customs fraud and legal shipments facilitated by third countries as part of global trade. The US, however, appears intent on blurring that distinction… providing Washington with a convenient pretext to fiddle with the USMCA’s rules of origin and compel more US content to the detriment of the two other signatories to the pact. [to access the full story a Globe and Mail subscription is required]
A sweeping bipartisan housing affordability bill President Trump has refused — so far — to sign is set to become law on Friday, provided the president doesn’t act. The legislation, called the 21st Century ROAD to Housing Act, aims to improve housing affordability by incentivizing local governments to build more homes by streamlining complex environmental review processes, making it easier for credit unions and banks to issue mortgages, expanding access to modular homes, and restricting large corporate investors from purchasing single-family homes. Following months of negotiations, the bill passed Congress by wide margins in late June. …But even without Trump’s signature, the housing bill is on track to become law on Friday due to a quirk of constitutional law. …Trump could still veto the bill before Friday, although the final version passed Congress so overwhelmingly — 85-5 in the Senate and 358-32 in the House — that the legislative branch could potentially override his veto.
The US has formally declined to renew the USMCA trade agreement for a further 16 years. While existing tariff-free trade terms will continue, the decision triggers annual reviews until the agreement expires in 10 years. President Trump openly views the agreement as detrimental to US manufacturing, placing the burden of concessions firmly on Mexico and Canada. But as today’s chart shows, Canada has a much lower reliance on the US than Mexico, and the Carney administration is taking active steps to diversify its export base further. Exports from industrial sectors subject to tariffs – metals and auto – have fallen sharply, but the hit to activity is limited, as these account for just 2.5% of GDP. …Adjusted for a shrinking working-age population, production in these sectors has picked up. …Goods exports to the US make up close to one-third of Mexico’s GDP. Canada’s share is also high at 15%, but has fallen over time.
State-level permitting activity continued to reflect a divided housing market through the first five months of 2026. Elevated mortgage rates and ongoing affordability challenges continued to weigh on single-family construction across much of the country, while multifamily permitting remained comparatively stronger, supported by gains in several regions despite continued weakness in parts of the South. Over the first five months of the year, the number of single-family permits issued nationwide reached 380,130. Compared with the same period in 2025, this represents a 6.1 percent decline compared with the May 2025 total of 404,977. In contrast, multifamily permitting activity remained stronger, with 208,192 permits issued nationwide, marking a 6.5 percent increase from the same period last year.
On July 9, 2026, Mercer International received a notice from Nasdaq staff that the company’s common stock had failed to meet the exchange’s minimum bid price requirement of $1.00 per share for 30 consecutive business days, triggering a formal non-compliance status under Nasdaq rules. The notification does not immediately affect the listing or trading of Mercer’s securities, but it places the company under an initial 180-day compliance period in which it must restore its share price to at least $1.00 for ten consecutive business days to avoid potential future delisting pressure. Mercer is working to regain compliance, though it acknowledges there is no assurance it can meet the requirement within the timeframe. The development… could influence investor sentiment and the company’s capital markets flexibility depending on its ability to achieve and sustain the mandated bid price threshold. [to access the full story a Globe and Mail subscription is required]
High mortgage rates aren’t the only reason homeownership remains out of reach for many Americans. Behind the scenes, homebuilders are grappling with an overlooked challenge — a shortage of skilled workers — that is slowing construction and making it harder to close the nation’s housing gap. Builders say the labor shortage is creating a ripple effect throughout the housing market, delaying projects, raising construction costs and limiting the number of new homes coming online at a time when demand continues to outpace supply. “Labor is one of the largest and most expensive inputs when it comes to home production and land development,” Jim Tobin, president and CEO of the NAHB. He said that every month, the construction industry is short by approximately 250,000 workers. …A recent NAHB report estimates builders will need roughly 723,000 new workers annually to keep pace with demand and help close the nation’s 1.5 million-home housing gap.
In the second quarter of 2026, the NAHB Remodeling Market Index (RMI) posted a reading of 61, down one point compared to the previous quarter. The RMI has remained in the low 60s consistently over the past year. Even with this slight decline from the previous quarter, remodeler sentiment remains the standout sector within the housing industry, outperforming both its single-family and multifamily counterparts. …However, ongoing economic uncertainty and current cost pressures due to inflation are causing project delays, especially for larger ones. In the latest RMI survey, 74% of remodelers reported that their suppliers have increased prices of materials since March due to higher fuel costs, with the average increase in materials prices over that span being 6.7%.
A historic drought is turning Colorado’s mountain landscapes into a tinderbox. After last winter’s record-low snowpack, wildland firefighters who continuously monitor indexes of weather and climate data to help predict wildfire risk and how conditions might affect fire behavior say they’re staring down unprecedented levels of dryness. “That lack of snowpack has had a very real impact on the fuels, the vegetation — specifically the large logs that are on the ground,” said Jim King, the fire behavior analyst for the Willow Fire burning near Leadville. “Those are 1,000-hour fuels. The way we measure those in this line of work, they’re just at the very peak. They’re basically as dry as they can get.” …King described how bone-dry logs in the dense forest near Turquoise Lake, along with high winds, contributed to 100-foot columns of flames and extreme fire behavior that at times threw “spots” …more than a half mile ahead of the blaze.
CALIFORNIA — A bipartisan bill intended to protect people and forests from wildfires in the Shasta-Trinity and other national forests is dividing lawmakers and conservationists in Northern California and nationwide. Supporters of the Fix Our Forests Act say it speeds up the bureaucratic process for approving projects that reduce wildfire risk in national forests. These include control burn and vegetation removal projects. A chorus of conservationists opposed to the bill say they worry about uncontrolled logging in some of the country’s pristine forestlands. …According to the bill’s wording, it would limit how much environmental protection oversight projects that reduce vegetation would have to surmount before they’re approved. It also would limit legal challenges to those projects from community and environmental groups. The latter has been dividing lawmakers across both parties for more than a year.
Officials at the U.S. Forest Service are proposing new management plans for eastern Oregon’s Blue Mountains that include potentially tripling the amount of logging across 5.5 million acres in the next decade. The Forest Service published a draft of proposed changes to the 35-year-old Blue Mountain Forest Plan last week. It would allow more logging, mining and grazing across four national forests spread across eastern Oregon, as well as parts of southeast Washington: the Malheur, Ochoco, Wallowa-Whitman and Umatilla National Forests. The public has until Sept. 30 to submit comments on the 350-page draft proposal. The draft plan … predicts everything from habitat conservation to forest carbon storage would improve over the long term if more logging is allowed because strategically logging and grazing parts of the forest would prevent wildfire, which officials characterize as the biggest threat to habitat and forest loss. Environmental advocates disagree with the framing.
To Caleb Chaplin, it’s clear what sets a patch of old forest on his family’s land in Naples apart from the woods around it. …Some of the trees are up to 200 years old. Foresters call these woods “late successional and old growth.” They’re also some of the rarest features on Maine’s landscape, trap lots of greenhouse gas and provide critical habitat for unique species. Chaplin said his family was planning to harvest the stand this year. …Then they learned the New England Forestry Foundation would pay them to delay harvesting. Chaplin said it was a tough decision at a time when these big trees are drawing some of the highest prices in the timber market. Ultimately, the family agreed to leave the stand alone for 10 years, and work with the foundation to develop a permanent conservation plan.
Trees do not necessarily keep growing for as long as they keep photosynthesizing, according to a new study published in Science Advances. Researchers found that oak trees continue absorbing carbon dioxide well after their annual growth has ended, suggesting forests may store less carbon in wood than many climate models currently predict. The discovery challenges a long standing assumption that higher rates of photosynthesis naturally lead to greater tree growth. If trees continue taking in carbon without turning much of it into new wood, less carbon may remain locked away over the long term. …Scientists have generally expected that rising atmospheric CO2 levels would boost photosynthesis, leading to faster growth and increased long term carbon storage. The new findings suggest …trees may continue absorbing carbon, [but] much of it does not necessarily become new wood. Instead,[it’s] used for other functions, reducing the amount of carbon stored in forests compared with previous expectations.
COLORADO — A pilot from Sooke on Vancouver Island was killed after the helicopter he was flying while battling wildfires in Colorado crashed into a reservoir. The aircraft reportedly went down in the Silver Jack Reservoir, shortly after 5 p.m. Sunday. The Gunnison County Sheriff’s Office says a dive team recovered the body of 56-year-old Nicholas Dale of Sooke, BC, from the submerged helicopter. The sheriff’s office says the helicopter was battling the 148-square-kilometre Gold Mountain wildfire when the crash occurred. It said the U.S. National Transportation Safety Board and Federal Aviation Administration are still investigating the incident. …The Associated Press reported that a procession of law enforcement vehicles carried Dale’s body to the city of Grand Junction, as residents turned out to express their gratitude to the fallen pilot and the thousands of firefighters still battling the blaze. …Dale was the fourth person killed in recent weeks while battling Colorado wildfires. 
The Gold Mountain fire in Ouray County, west of Pueblo, has now burned more than 32,000 acres, but firefighters were hoping to make progress Thursday before forecast hot weather begins this weekend. In the latest update from the fire incident management team, authorities said 984 people were working on the blaze, which is now 8% contained. Much of the focus remains on protecting any structures that might be threatened by the fire, which has closed areas to the public in the Grand Mesa, Uncompahgre and Gunnison national forests. Jeramy Dietz, operations section chief for the incident management team, said firefighters were pleased to be able to allow some people back into the area to see their homes on the southwest side of the fire. Now, a lot of the focus is on getting containment lines built to the north and east of the active fire.