Robert Dietz
The Trump 2.0 administration is underway and disruption is the word of the day in Washington, D.C. The new Trump team hit the ground running, with policy action expected in the areas of regulatory reform, a smaller and more efficient federal workforce, extension of the 2017 tax cuts, tariffs as revenue generators and negotiation tools, and more to come on immigration actions and a more secure border. The sheer breadth of policy actions is a lot for the economy to digest. These policies will offer home builders and remodelers both positive and negative risks in the months ahead. This dual set of risks has been reflected in financial markets, with stocks valuing the focus on growth and efficiency but the bond market reflecting inflation and budget deficit concerns. As a result, investors have pushed long-term interest rates higher since last fall, with the 10-year Treasury rate in the 4.5% to 4.6% range. Mortgage rates remain elevated near 7%.
NAHB projects more economic growth in the quarters ahead, albeit with some disruption in the presidential transition. There is a solid base to build on, with fourth quarter GDP growth coming in at a better-than-expected 2.3% annualized rate. Housing’s share of GDP registered at 16.2% at the end of 2024. The Federal Reserve is undecided on future risks to both inflation and unemployment and will likely hold the federal funds rate at the current top target of 4.5% until at least the third quarter. …However, home sales and building conditions will depend greatly on which policies are for negotiation (such as a proposed 25% tariff on Canadian and Mexican imports) and which policies are intended to be long-term changes to the economy (regulatory reform, for example).Tariffs on Canadian lumber are a near-term concern, with the existing duty rate speculated to increase from a current 14.5% rate to near 30% later this summer.
WASHINGTON — Reports indicate that the B.C. Minister of Forests has created an “Advisory Council” to develop strategies for combating U.S. antidumping and countervailing duties. These duties are in place as a result of repeated findings by the U.S. Department of Commerce and U.S. International Trade Commission that Canada’s egregious ongoing dumping practices and long-standing subsidies to its industry have caused havoc in the U.S. market. Andrew Miller, Chairman and Owner of Stimson Lumber, stated that “this is not a complicated issue. Canada must stop dumping its excess lumber production into the U.S. market and should stop subsidizing its industry instead of convening an ‘Advisory Council’ in British Columbia to study ways of getting around U.S. trade laws.”
U.S. President Donald Trump in an all-caps post on Truth Social Thursday teased a new round of sweeping reciprocal tariffs, matching the higher rates other nations charge to import American goods. …Reciprocal tariffs were one of Trump’s core campaign pledges — his method for evening the score with foreign nations that place taxes on American goods and to solve what he has said are unfair trade practices. …He is set to share more details on the tariffs ahead of his visit with Indian Prime Minister Narendra Modi, White House press secretary Karoline Leavitt told reporters on Wednesday. …The tariffs are likely to hit developing countries hardest, especially India, Brazil, Vietnam and other Southeast Asian and African countries, given that they have some of the widest differences in tariff rates charged on U.S. goods brought into their countries compared to what the U.S. charges them.
Reciprocal tariffs are straightforward in theory: The U.S. would pose the same levies on imported goods from a given country that the other country imposes on their U.S. imports. But it gets far murkier in practice, as countries often charge different tariffs on different classes of goods. Goldman Sachs economists outlined three approaches Trump could take. “Country-level reciprocity” is the “simplest” strategy which would have the U.S. impose the same average tariffs. “Product-level reciprocity by country” would have the U.S. place marching tariffs on a good-by-good basis by trading partner.” Reciprocity including non-tariff barriers” is the “most difficult” approach as it would encompass a complicated web of inputs including inspection fees and value-added taxes. …4.8% is the U.S.’ weighted average tariff rate if Trump implemented the country-level strategy. …Goods from the 20 countries the U.S. has free trade agreements with, including Australia, Canada, Mexico and Panama, won’t be affected – though Trump has targeted several of those countries in recent weeks.
BURNABY, BC — Interfor recorded a net loss in Q4, 2024 of $49.9 million compared to a Net loss of $105.7 million in Q3, 2024 and a net loss of $169.0 million. Adjusted EBITDA was $80.4 million on sales of $746.5 million in Q4, 2024. …For the full year, Interfor reported a net loss of $304 million in 2024, a 14% increase from the $267 million net loss in 2023. Total sales fell 9% to $3 billion, down from $3.3 billion in the previous year. …Near-term volatility could be further impacted by a potential tariff on Canadian lumber exports… however, the Company is well positioned with a diversified product mix in Canada and the U.S., with approximately 60% of its total lumber produced and sold within the U.S. …Despite challenges, the company remains positioned to adjust production and capital spending in response to market conditions. …The company plans to invest $85 million in 2025, including the continued rebuild of the Thomaston, Georgia sawmill.
Pressing ahead with steep tariffs on Canada and Mexico risks exacerbating the US housing crisis and threatening the broader economy, dozens of congressional Democrats have warned Donald Trump. …In a letter to Trump seen by the Guardian, Democrats noted that the US imports key construction materials worth billions of dollars – from lumber to cement products – from Canada and Mexico each year. “Given the severe housing shortage, compounded by rising construction costs, persistent supply chain disruptions, and an estimated shortfall of 6m homes, these looming tariffs, while intended to protect domestic industries, risk further exacerbating the housing supply and affordability crisis while stifling the development of new housing,” they wrote. More than 40 Democrats urged the White House to consider housebuilding industry estimates that the proposed tariffs will raise the cost of imported construction materials by up to $4bn.
Experts told us that, in theory, if the US stopped importing crude oil and lumber from Canada and Mexico, it still would be able to meet domestic demand using natural resources available in the U.S. But, in reality, they said, the transition would be costly and take some time to implement, among other complications. “Sure: we could probably meet most of our lumber needs domestically,” said Marc McDill at Penn State University. “The reasons why we don’t boil down to two things: 1) sometimes imports are cheaper than our own suppliers, and 2) we value our forests for a lot of other things.” He added that without lumber from Canada, “1) prices would go up, 2) we would harvest more of our own trees, and 3) we would import more from countries.” …Rhett Jackson at the University of Georgia, said that differences in the lumber produced in the US and Canada may be problematic. …“All lumber is not created equally.”
A 30-day delay in implementation of tariffs on Canadian shipments to the US reset recent trends in framing lumber markets. Sales picked up in most regions and species, but higher quotes early in the week retreated nearer to last week’s levels. Western S-P-F sales were mixed, but several secondaries reported their strongest days of the year as buyers padded relatively thin inventories with insurance loads. Prices remained close to last week’s levels, but supplies of some items tightened in late trading. Lumber futures swung from extreme volatility Monday and Tuesday to an upward trend towards the end of the week. The threat of tariffs drove prices up, but selling commenced after the delay. The biggest gains were posted in green Fir, where a supply-side rally pushed Std/#2&Btr dimension prices $15-35 higher. The Random Lengths Framing Lumber Composite Price posted another modest adjustment, finishing $5 higher. Most Southern Pine producers throttled back quotes.
The U.S. market accounts for 5-10% of Sweden’s forest industry exports, depending on the segment, meaning the direct impact of potential new tariffs remains limited, said Christian Nielsen, market analyst for wood products at Swedish Forest Industries Federation. The U.S. relies on imports for 25% of its lumber consumption, primarily from Canada. Higher tariffs on Canadian wood could raise costs for American consumers while improving the competitive position of European suppliers. However, Nielsen noted that future tariffs directly targeting EU exports remain uncertain. In the pulp and paper sector, the U.S. could rely entirely on domestic production, reducing the need for imports. Sweden currently exports 7% of its pulp and 5% of its paper and board products to the US. In total, Sweden exports 92% of its paper and board production, and global trade flows could be affected by tariff changes. [END]
Year-end 2024 Southern Pine lumber (treated and untreated) exports hit 565.7 Mbf, which was up 11% over the previous year, according to December 2024 data from the USDA. On a monthly basis, Southern Pine lumber exports were up 21.9% in December 2024 over the same month in 2023 but down 2.2% from November 2024. …Softwood imports, meanwhile, were down 11.5% in December 2024 compared with the same month a year ago and down 11% from November 2024. …Mexico remains the largest export market (by volume) of Southern Pine and treated lumber, up 23% over 2023 with 150.2 Mbf of imports. The Dominican Republic, the No. 2 importer of Southern Pine, ended the year 19.1% ahead of 2023 with 92.3 Mbf. India’s total of SYP imports ended 3.1% ahead of last year with 36.6 Mbf. Canada: up 30% with 27.4 Mbf in 2024. Canada ended the year as the No. 5 importer of Southern Pine lumber (treated and untreated).
Ending the forced use of paper straws: Today, President Donald J. Trump signed an Executive Order to end the procurement and forced use of paper straws. The Federal government is directed to stop purchasing paper straws and ensure they are no longer provided within Federal buildings. The Order requires the development of a National Strategy to End the Use of Paper Straws within 45 days to alleviate the forced use of paper straws nationwide. Bringing back common sense: The irrational campaign against plastic straws has forced Americans to use nonfunctional paper straws. This ends under President Trump. …President Trump has made it a top priority to promote a clean and healthy environment for the American people.
WASHINGTON, D.C. – Senator Mike Lee (R-Utah), Chairman of the Senate Committee on Energy and Natural Resources, and Senator John Curtis (R-Utah) joined Representatives Mike Kennedy (R-Utah-03), Burgess Owens (R-Utah-04), Blake Moore (R-Utah-01), and Celeste Maloy (R-Utah-02), to introduce the Utah Wildfire Research Institute Act. This bill establishes a federal wildfire research institute at Utah State University to study wildfire ecology and develop innovative solutions to reduce wildfire risks. The institute will collaborate with local, state, and federal partners to improve forest and rangeland management and implement strategies for long-term ecological restoration. “Robust forest management strategies are essential to protecting Utah’s nearly 22 million acres of forests from catastrophic wildfires. The Utah Wildfire Research Institute Act will significantly enhance our state’s wildfire preparedness by bolstering the tools and resources available to proactively manage and protect our forests and communities,” said Chairman Lee.
U.S. Senator Jon Ossoff is introducing a bipartisan bill to help grow Georgia’s forestry industry. Sen. Ossoff and Sen. Bill Cassidy, M.D. (R-LA) introduced the bipartisan Forest Data Modernization Act, which would modernize and improve the U.S. Forest Service’s Forest Inventory and Analysis program to ensure reliable data is available to inform forest management decision making. The bipartisan bill would require the Forest Service to prepare an updated strategic plan to expand data collection and further integrate advanced remote sensing technology. According to the forestry industry, the improvements would unlock new economic opportunities for foresters and better protect the environment. The companion bipartisan bill is being introduced by Representatives Kim Schrier (D-WA-08) and Barry Moore (R-AL-01) in the U.S. House of Representatives …“The Georgia Forestry Association (GFA) commends Senators Ossoff and Cassidy for their bipartisan leadership in re-introducing the Forest Data Modernization Act.
Washington D.C.–The Sustainable Forestry Initiative (SFI) is proud to announce a groundbreaking new project to advance climate smart forestry practices across the United States, supported by a generous investment of over $800,000 from the Doris Duke Foundation. The project, Advancing Carbon Stewardship Practices for Large Landowners in the United States, will use a forest sector-focused approach to advance forest management and conservation activities to both enhance the carbon sink and reduce sources of emissions from forests. Forests … are experiencing increased frequency and severity of fire, drought, pest outbreaks, and disease—all of which negatively impact forest and community health, economic development, and resiliency while threatening our safety. “We are so thankful for this investment from the Doris Duke Foundation to leverage our network, scale, and the SFI Forest Management Standard, which includes progressive requirements on climate and fire,” said Kathy Abusow, President and CEO of SFI. 
A bipartisan group of senators introduced legislation Thursday that would create a new Wildfire Intelligence Agency, seeking to streamline the federal response to fires. The bill, led by Sens. Alex Padilla (D-Calif.), Tim Sheehy (R-Mont.), John Hickenlooper (D-Colo.) and Steve Daines (R-Mont.), came in the wake of recent blazes that decimated parts of Southern California, primarily in the Los Angeles region. “The scale of the wildfire crisis demands a singular, whole-of-government wildfire intelligence center to foster cross-agency collaboration and save lives,” Padilla wrote in a statement. The joint office would share information with the Department of Agriculture, the Department of Commerce and the Department of the Interior, according to the legislation. “Wildfires don’t care about state lines or forest service boundaries,” Hickenlooper said. “A centralized wildfire intelligence center will speed our response to fires and promote cross-agency collaboration to tackle them.”
WASHINGTON – A bipartisan group of lawmakers has introduced the Future Logging Careers Act, a bill aimed at allowing teenagers from logging families to gain early hands-on experience in the industry under parental supervision. The legislation, introduced by U.S. Senators Jim Risch (R-Idaho) and Angus King (I-Maine), along with U.S. Representatives Glenn “GT” Thompson (R-Pa.) and Jared Golden (D-Maine), would amend the Fair Labor Standards Act to permit 16- and 17-year-olds to work in certain mechanized logging operations. Similar exemptions currently exist for youth working in family-owned farms. Supporters of the bill, including the American Loggers Council and the Associated Logging Contractors of Idaho, argue that the measure would help sustain family-run logging businesses by allowing younger generations to gain experience before entering the workforce as adults. Industry representatives have pointed to labor shortages and the challenges of retaining workers as key reasons for the bill’s introduction.
Alabama’s roads and bridges are already under immense strain, but two bills moving through the Legislature could accelerate their decline—adding 150 million dollars in maintenance costs annually, reducing highway lifespan by up to 30 percent, and forcing weight restrictions on hundreds of bridges. Senate Bill 110 and House Bill 204 would allow heavier log trucks to operate on Alabama highways while simultaneously limiting enforcement by requiring state troopers to escort overweight trucks to permanent platform scales—effectively halting roadside safety inspections for extended periods. Experts warn that these changes could have devastating consequences for infrastructure durability, public safety, and taxpayer-funded repairs. The push for heavier loads is being driven by logging and timber industry interests, which stand to benefit financially from relaxed restrictions. However, transportation and infrastructure experts warn that the cost to the public far outweighs any economic gain.
Senator Mike Rounds has re-introduced a bill that would require National Forest superintendents to submit remediation plans if their timber production falls well below the allowable amounts laid out in forest plans. The remediation plans would be required to bring timber production in the respective forests back to at least 75% of their allowable amounts. Rounds says timber production in the Black Hills has far below its allowable 181,000 units. “Three years ago, we did about 80,000, the year before last we did about 60,000, and we’re down to about 59,000 units this year, and so the bottom line is not even a third of what we should be harvesting in the Black Hills is actually being done,” Rounds said. “But it also means some of those forests that could be more properly managed, based upon their own plan are not being harvested, the plan is not being followed,” Rounds said.
The State of New York last week announced the launch of two new interactive tools for recording and tracking the number of trees planted as part of a climate initiative to reach 25 million trees by 2033. Developed by the state’s Department of Environmental Conservation and its Office of Information Technology Services, the Tree Tracker allows state agencies and private organizations and individuals to report the number and location of trees planted, as well as planting dates, species and tree size. “New York is taking decisive action to protect our environment and strengthen communities’ ability to withstand severe weather,” Gov. Kathy Hochul said in the press release. “Our progress toward the 25 Million Tree goal is a testament to the power of community-driven action, and the new Tree Tracker will make it easier for New Yorkers to track our progress, share updates and contribute to a healthier environment for the future.”
The Government has announced a new support mechanism for sustainable biomass generation post-2027. From 2027, Drax and other eligible large-scale biomass generators will be supported via a lowcarbon dispatchable CfD (Contract for Difference). If approved, the plan will keep the power station running until 2031. Under this proposed agreement, Drax Power Station can step in to increase generation when there isn’t enough electricity, helping to avoid the need to use more gas or import power from Europe. When there’s too much electricity on the UK grid, Drax can reduce generation, helping to balance the system. Importantly, the mechanism will result in a net saving for consumers. …The agreement also prioritises biomass sustainability. Drax supports these developments and will continue to engage with the UK Government on the implementation of any future reporting requirements.
The UK government has agreed a new funding arrangement with the controversial wood-burning Drax power station that it says will cut subsidies in half. …The new agreement will run from 2027 to 2031 and will see the power station only used as a back-up to cheaper renewable sources of power. …The government says the company currently receives nearly a billion pounds a year in subsidies and and predicts that figure will more than halve to £470m under the new deal. …The new agreement also states that 100% of the wood pellets Drax burns must be “sustainably sourced” and that “material sourced from primary and old growth forests” will not be able to receive support payments. All the pellets Drax burns are imported, with most of them coming from the USA and Canada. BBC has previously reported that Drax held logging licences in British Columbia, and used wood, including whole trees, from primary forests for its pellets.
As institutional interest in real asset investing grows, forestry is gaining recognition beyond its core enthusiasts for its ability to produce income and capital growth, alongside added benefits like carbon sequestration and biodiversity protection. However, trust in sustainability-focused investments remains a challenge. In EY’s 2024 Institutional Investor Survey, 85% of respondents said misleading claims about sustainability are more of a problem today than five years ago, despite regulators’ efforts to quash exaggerated ESG statements. …A persistent narrative is that established timberlands are better, safer investments than new greenfield developments. The truth is more nuanced. Greenfield projects, which involve reforesting degraded or underused land, offer an opportunity to achieve ‘additionality’ – a crucial component of effective carbon sequestration. …For forestry investors, the upshot is clear: regulatory uncertainty is currently a barrier to restoring widespread trust in carbon markets, and resolving this will take time.
Can you fly airplanes with wood? The answer is: yes. It’s a very qualified “yes” — and it may not happen for many years — but the potential exists to manufacture sustainable aviation fuel from residual wood products and other non-petroleum-based sources that can reduce an airplane’s carbon footprint. “The technology to fly airplanes with wood exists but needs to be scaled up to show the true potential,” Rick Horton, executive vice president of Minnesota Forest Industries, told the House Agriculture Finance and Policy Committee at an informational hearing Monday. Horton was one of several testifiers who said using sustainable aviation fuel to power airplanes is in its infancy and needs large-scale development — and probably government subsidies — to make it economically viable… Sustainable aviation fuel currently costs two to five times more than conventional jet fuel.