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.
OTTAWA — Canada’s annual inflation rate in May accelerated more than expected to 3.2%, a 29-month high, data showed on Monday, as the impact of higher crude oil prices due to the Iran conflict continued to filter through gasoline costs. Analysts polled by Reuters had estimated the annual inflation rate to touch 3% in May, up from 2.8% in April. The prices, however, are already showing a major reversal in June after an interim peace deal was signed between the United States and Iran last week, which, analysts have said, could help ease the headline number in June. Statistics Canada said excluding the impact of gasoline prices, the consumer price index still posted a higher increase of 2.2% in May from 2% in April. The monthly inflation rate rose to 1% in May, exceeding expectations of 0.8% rise. This is the highest monthly rise in 15 months.
Lumber climbed past $630 per thousand board feet, the highest level since October, amid higher effective US import costs on Canadian softwood and tighter expected supply. Prices rose despite a small reduction in preliminary antidumping and countervailing duties, because the combined tariff burden remains high at about 35.9% including the existing Section 232 levy, set to take effect in August. The market is also being driven by uncertainty ahead of final duty decisions, prompting buyers to accelerate purchases and lift near-term demand. At the same time, US domestic production is still constrained, while housing-related consumption remains structurally large, with softwood lumber and engineered wood products heavily used in new construction. Each new home requires roughly 15,000 board feet of lumber plus extensive engineered wood products, keeping baseline consumption elevated even in a softer housing cycle. [END]
Lumber climbed to $617 per thousand board feet, the highest level since October, as constrained supply outweighed subdued conditions in the housing market. The US lumber market remains tight, with domestic production failing to fully offset reduced imports from Canada following tariffs. Canada still supplies roughly 30% of US consumption, underscoring its continued importance despite trade barriers. The US Commerce Department has proposed lowering combined duties on Canadian lumber to 24.8% from 35.2%, but an additional 10% Section 232 tariff keeps the effective rate close to 35%. Supply pressures have been further intensified by wildfire damage and other production disruptions in Canada, prompting British Columbia to introduce emergency measures aimed at boosting timber availability after storms and fires threatened output. [END]
BC has seen lower timber harvests and lumber and lumber exports. …BC exported 2.5 million m3 of softwood logs in 2025, a trend that has been in place since 2022. …BC lumber exports have always focused on the US market, with 64% of production and 76% of total exports directed at the US in 2025. But with US duties and tariffs totalling over 45%. the volumes started to drop in 2025 Q4. Total BC lumber exports in 2025 were 5.1 billion bf, a drop of 12% from 2024. Lumber exports to the US were 3.83 billion bf in 2025, a drop of 14.3% from 2024. …In the first quarter of 2026, total BC lumber exports were lower by 20.1% compared to 2025 Q1, with exports to the US down by a whopping 24.7% (the bite of US duties and tariffs is evident), lower to Japan by 17.7% but higher to China by 10%. It will be challenging for BC mills in export markets for much of 2026 unless demand improves or prices move higher—both unlikely until 2027.
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%.
The U.S. goods trade deficit is widening, the Commerce Department said Friday, suggesting stockpiling ahead of higher tariffs and a continued reliance on imports for the domestic data center rollout, analysts say. The goods trade deficit for May jumped more than $20 billion to $105.8 billion, up from $83 billion in April, according to 
A closely watched inflation report is set to reveal how much price growth picked up in May — and whether many American consumers remain mired in an affordability crunch. Wall Street forecasters expected the pace of personal consumption expenditures (PCE) to have quickened compared with April data amid higher oil prices and stronger consumer spending. The monthly PCE report is the Federal Reserve’s preferred inflation gauge. New Fed Chairman Kevin Warsh has said the central bank is committed to bringing inflation back to its 2% target — a level it has failed to reach for the past five years. Wall Street now anticipates the Fed will raise its key interest rate at least once by year’s end in a bid to counteract the stronger price growth.
China remains one of the world’s major importers of softwood logs and lumber, but its 
While supply concerns are still weighing on housing affordability, a combination of soaring prices and economic uncertainty is dragging on housing demand, according to the annual 
A top US Customs and Border Protection (CBP) official told Court of International Trade (CIT) Judge Richard Eaton on 9 June that the agency is still creating a process for refunding tariffs that involve more complex entry types and that have been finally liquidated (i.e., are more than 90 days post-liquidation) in the Consolidated Administration and Processing of Entries portal. “We can’t do it all at once,” CBP Executive Assistant Commissioner Susan Thomas testified. ….The US Trade Representative (USTR) is 
Global oil prices fell on Monday following news of a tentative deal between Iran and the U.S. to extend their ceasefire agreement and reopen the Strait of Hormuz, but a veteran oil watcher doesn’t see crude prices returning to pre-war levels anytime soon. Eric Nuttall, partner at Ninepoint Partners, said that traders are trying to determine where the price of oil will settle out in the coming days and weeks, as many key details about the deal still need to be ironed out. …Nuttall noted that even if the strategically important Strait of Hormuz is fully reopened as a result of the Iran-U.S. deal, it will take time for oil markets to recover from the volatility of the last three and a half months. …In addition to the logistical backlog and supply chain disruption, the war in Iran has caused extensive damage to petroleum facilities across the Middle East, Nuttall explained.
This month, consumer sentiment ticked up about four index points, or 9%, with consumers experiencing some relief due to the early-month easing in gasoline prices. This measured improvement in sentiment was widespread, seen across age, education, and political party. Lower-income consumers exhibited a particularly strong sentiment increase, consistent with the fact that gasoline comprises a larger share of their budgets. Overall, assessments and expectations of personal finances and business conditions all rose this month. Even with June’s early gains, however, views of the economy are still relatively dour. Sentiment is currently 13% below January 2026 and 19% below a year ago, as consumers remain focused on kitchen table issues. They feel burdened by the recent escalation in inflation and worry that higher inflation could remain stubborn going forward, particularly in the short run. Interviews for this release were completed between May 19 and June 8.
Softwood markets across Latin America and the Asia-Pacific are approaching a turning point, according to the latest market report from Global Wood Trends and O’Kelly Acumen. The report says some of the world’s lowest-cost plantation producers are increasingly linked to major importing markets where domestic supply growth is limited. “With harvests expected to decline in key exporting regions, China remaining structurally dependent on imports, and Japan nearing peak production, the regional supply balance is likely to tighten through 2035 – creating new risks and opportunities for producers, investors, traders, and wood consumers,” it says. The ‘Global Softwood Roundwood Supply – Latin America & Asia-Pacific’ report… says Latin America, Asia, and Oceania. Latin America remain a highly competitive source of softwood roundwood. Brazil, Chile, Argentina, and Uruguay account for nearly all regional softwood supply, supported by large-scale plantation forestry and investment by integrated forest-product companies and institutional owners. 
Japan’s housing starts surged 33.9% yoy in May 2026, sharply accelerating from a 11.4% increase in the previous month and marking the second straight month of expansion. It was also the fastest growth since March 2025, topping market expectations of 31.8%. Growth was broad-based across most segments, including owner-occupied homes (31.8% vs 19.5% in April), rental housing (33.3% vs 17.3%), built-for-sale housing (39.2% vs 3.4%), and two-by-four homes (24.8% vs 64.8%). In contrast, prefabricated housing fell 3.4%, swinging from a 11.1% increase in April.
Russia’s timber exports to China, its largest overseas market, fell sharply in the first four months of 2026 as Beijing’s prolonged property downturn weighed on demand, adding to mounting pressure on an industry already struggling with sanctions, high borrowing costs and weak profitability. Exports of Russian sawn timber to China dropped 30% year on year to 2.6 million cubic meters in January-April, while export revenue declined 26% to $603.7 million, the Vedomosti business daily reported. …China accounted for roughly half of Russia’s sawn timber exports in 2025 after Europe closed its market following Moscow’s full-scale invasion of Ukraine. But weakening Chinese construction activity, rising logistics costs and a stronger ruble have eroded demand, leaving Russian producers with fewer alternative markets. Russia’s total sawn timber exports fell 32% year-on-year to around 4 million cubic meters in the January-April period. China imported 11.2 million cubic meters of Russian sawn timber in 2025.