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.
Another day, another tariff threat for markets to digest. This time it’s lumber getting whipsawed, as U.S. President Donald Trump says he is going to bring in tariffs on Canadian lumber imports to the U.S. soon. Speaking to reporters on Wednesday evening, Trump added lumber to the list of items he plans to slap tariffs on in the near future. …Canada would feel any such policy directly, but perhaps not as painfully as you might think. As is the case with oil, lumber is one front in the trade war where Canada can do a lot of collateral damage of its own. …While the U.S. theoretically has enough trees to meet its own needs, ramping things up both in terms of the logs and the capacity to process them would be next to impossible in the short term. Recall during the pandemic when Canadian lumber prices spiked by more than 300%, yet U.S. buyers kept buying. 
Canadian producers of softwood lumber are bracing for a decision this week from the U.S. Department of Commerce that could mean a surge in anti-dumping duty rates, compounding the industry’s worries over President Donald Trump’s threats for sweeping tariffs on all imports from Canada. Most Canadian producers are currently paying 7.66% in anti-dumping duties, but that could jump to 20 per cent, trade experts say. The Commerce Department’s decision, slated for Thursday, will be preliminary, with an effective date in August. …Analysts are [also] predicting that there will be higher countervailing duty rates, with the Commerce Department scheduled to issue a preliminary ruling in May. Forestry analyst Russ Taylor forecast that countervailing duties could rise to about 10%. Most Canadian softwood producers are paying countervailing and anti-dumping duties that currently total 14.4 per cent. …The Commerce Department’s administrative review is based on softwood markets in 2023, when prices were low. [to access the full story, a Globe and Mail subscription is required]
WASHINGTON — President Trump is taking a blowtorch to the rules that have governed world trade for decades. The 
LONDON/BRUSSELS — The US paper and pulp industry is lobbying the Trump administration to ask the EU to declare the US deforestation-free, a step that could make it easier for exporters to meet the bloc’s new environmental rules. From December, the European Union’s anti-deforestation policy will ban imports of commodities linked to forest destruction. Brussels already delayed the policy’s launch by a year. …”A delay does not solve our concerns with the regulation’s complex requirements and significant technical barriers,” said Heidi Brock, CEO of the American Forest and Paper Association (AF&PA). …The law does not contain a category of countries deemed to be deforestation-free – despite EU lawmakers attempting unsuccessfully to add a new “no risk” category of countries which would face even lighter rules. Any changes to the EU law would require a legal proposal from the Commission, and approval from EU lawmakers and member states.
SQUAMISH, BC — Peter Dickson has owned FraserWood Industries, a Squamish-based timber manufacturer, since 1998. He has grown his business, earning contracts near and far, including the Sea to Sky Gondola service building and log cabins at Walt Disney World. One third of his business is exported to the US. …“The biggest problem is our American customers will be reluctant to sign moving forward with the uncertainty.” …David Girard sits on the government relations committee for the Sea to Sky Canadian Home Builders Association, and he said the tariffs would have an outsized impact on consumers and demand for Canadian products, and cause reduced employment. According to a recent survey by KPMG, 48% of Canadian companies contacted said they would invest or produce in the U.S. to retain American customers and reduce costs. But for FraserWood, that’s not an option.
WILLIAMS LAKE, BC — The City of Williams Lake has cancelled a lobbying junket to Victoria on the news Adrian Dix, minister of Energy, plans to meet with BC Hydro to discuss the imminent shut-down of the Atlantic Power station. The plant, which generates electricity through the burning of wood waste, is Williams Lake’s biggest industrial taxpayer. The company that owns it plans to shut down soon, unless the province can assure it better power rates and reliable fibre supply. The city has been lobbying the provincial government to prevent the power plant from shutting down, and had planned to converge on the BC Legislature tomorrow for the first day of the new BC legislative session. …The Atlantic Power plant is an independent power producers with a power purchase agreement with BC Hydro. The plant is owned by I Squared Capital, an American private equity investment firm.
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.
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.
NEW YORK — Mercer International reported fourth quarter 2024 net income of $16.7 million compared to a net loss of $87.2 million in the fourth quarter of 2023 and a net loss of $17.6 million in the third quarter of 2024. Q4 revenues were $488 million, down from $502 million in Q3, 2024 but up from $470 million in Q4, 2023. Mr. Juan Carlos Bueno, CEO, stated: “In the fourth quarter of 2024, softwood pulp prices remained strong, decreasing slightly from recent record prices.” …Hardwood pulp prices in China and North America decreased in the fourth quarter of 2024 as the market absorbed capacity increases from earlier in the year. …Lumber sales realizations increased, driven by modestly higher prices in the U.S. market, while in Europe, prices remained stable. 
Lumber futures have recently surged past $610 per thousand board feet, reaching a near three-month high as market conditions tighten. A combination of mill closures, reduced North American production capacity, and tariff concerns has led to increasing volatility in the lumber market. Investors and traders are closely watching these developments, as the outlook for lumber futures remains uncertain amid ongoing supply and trade disruptions. …One of the primary drivers behind the latest rally in lumber futures is the ongoing reduction in North American production capacity. …Adding to the supply concerns is the looming increase in U.S. tariffs on Canadian softwood lumber. For traders, this means increased volatility in lumber futures as market participants react to policy changes. Higher tariffs could discourage Canadian exports, forcing buyers to seek alternative sources or absorb the additional costs, further driving up lumber futures prices.
VANCOUVER, BC — Western Forest Products announced improved fourth quarter and fiscal 2024 results compared to the same period last year. Adjusted EBITDA was $14.4 million in the fourth quarter of 2024, as compared to negative $1.2 million in the fourth quarter of 2023, and negative EBITDA of $10.7 million in the third quarter of 2024. Adjusted EBITDA was $8.9 million for fiscal 2024, as compared to negative $29.9 million in fiscal 2023. Net loss was $1.2 million in the fourth quarter of 2024, as compared to a net loss of $14.3 million in the fourth quarter of 2023, and a net loss of $19.6 million in the third quarter of 2024. …“Despite challenging markets, we were successful in returning our business to positive EBITDA in 2024,” said Steven Hofer, CEO. …“The planned incremental US tariff will unfairly target and harm Canadian exporters like us, [and] will also hurt American consumers through higher lumber prices.” …We have informed customers of our intention to pass on the incremental US tariff.
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.
The significant risk that tariffs pose to Canada’s economy casts a potentially dark shadow over the housing market. Any economic turbulence arising from tariffs would be felt by participants, whose confidence is critical to the stability of the housing market. …Therefore, assessing the outlook for Canada’s housing market at this juncture is like putting a price on a home before an earthquake—it’s hard to know what shape the structure will be in at the end of the day. Still, we highlight some of the key themes in 2025. …Lower interest rates heat up demand. …Inventory of homes for sale is rebuilding in Canada. …Strained affordability, immigration and uncertainty to keep buyers cautious. …Affordability relief from rate drop will only be partial. …Absent any major economic shock, we’d expect housing market demand and supply to stay balanced in the year ahead, yielding minimal price increases Canada-wide.
California home builders say they have very little choice but to continue buying Canadian softwood lumber from places like British Columbia, even if US President Donald Trump issues a 25% penalty on imports next month. The state is in the midst of its rebuilding efforts from the Pacific Palisades wildfires that ravaged the Los Angeles area. …Dan Dunmoyer, who is the president of the California Building Industry Association said the rebuild will become a lot more costly. …“The price of lumber is already starting to go up some even without the tariffs in place out of uncertainty, which again is a reason not to move quickly on tariffs. …“We are very desirous to rebuild as quickly as possible and at the lowest cost possible. The timing of tariffs or additional costs to softwood lumber coming from Canada is very ill-timed.”
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).
For the past 25 years, the Federal Emergency Management Agency (FEMA) has helped develop building codes, the construction standards that help houses survive hurricanes, wildfires and earthquakes. Now, the Trump Administration has ordered that to stop. …FEMA is dropping out of the latest effort to improve building codes. …The recommendations FEMA submitted were filed with the International Code Council, an independent association that develops building codes used by states and local governments. The proposals FEMA is retracting its involvement from focus on helping homes survive strong winds, seismic shaking and rising floodwaters. …The ICC convenes experts and stakeholders in the building industry to review and improve building codes every three years, and is developing a new set of standards now. After they’re approved, many local and state governments across the country adopt the codes, which set the mandatory construction rules in their communities.
The cement industry is at a crossroads as decarbonization is expected to take its toll, resulting in a significant decline in demand, according to a paper by the World Cement Association (WCA). “The cement industry is undergoing an unprecedented transformation,” explains WCA CEO Ian Riley. “As we move towards a decarbonized future, understanding the true demand for cement is critical to ensuring that policies, technologies and investments align with reality.” The white paper examines disruptive factors such as alternative materials. …The report challenges prevailing forecasts and projects demand for cement and clinker will dip, mainly due to the rise of timber, greater use of admixtures, the move towards decarbonization of the industry as well as design practices that will reduce the concrete used. ..According to the paper, timber has replaced concrete and steel in many highrise buildings but limitations on the supply of timber are expected to curb its growth.
OTTAWA — The federal government has been ordered to reassess its 2022 approval of a popular weed-killer after a Federal Court judge ruled this week the original approval was unreasonable. Justice Russell Zinn gave Health Canada six months to reassess the health risks of glyphosate after the agency failed to show it considered new scientific evidence identifying new or elevated risks associated with the herbicide when it renewed the registration for a product containing it. …Monsanto, has faced multiple lawsuits in the US with multi-million-dollar awards to the plaintiffs, while others have been overturned. …The US Environmental Protection Agency reported in 2020 there were no risks to human health from current uses of the herbicide, but its assessment was overturned. …While the Federal Court’s ruling didn’t speak to the health risks of glyphosate, Zinn said Health Canada failed to show any evidence that it evaluated the new studies.
MONCTON, New Brunswick –
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.
Surprise, surprise, a mighty £7bn of subsidies since 2012 have not been enough to get Drax to stand on its own feet. More bungs are required to keep the wood fires burning at the enormous power plant in North Yorkshire. The energy minister Michael Shanks at least sounded embarrassed. He railed against the “unacceptably large profits” Drax has made, said past subsidy arrangements “did not deliver a good enough deal for bill payers” and vowed that that the definition of a “sustainable” wood pellet would be tightened. But the bottom line is that the government has agreed to crank the subsidy handle once again, just at a slower rate. Why? As he didn’t quite put it, Drax has us over a barrel if we’re not prepared to use more gas to generate electricity. A renewables-heavy system needs firm, reliable power as backup. Transporting wood pellets from North America to burn in Yorkshire is deemed the solution.