Following the US government’s “Liberation Day” tariff announcements on April 2, 2025, the bond market experienced significant turmoil. …If high bond yields persist, timberland may find itself in a vexed position—caught between its traditional role as a real biological asset and inflation hedge, and its declining relative appeal compared to more liquid bonds offering higher returns. To remain competitive in this environment, timberland may face pressure to support higher discount rates, which could weigh on valuations. Additionally, tariff escalations and geopolitical tensions could disrupt wood product exports, further increasing risk. …The World Trade Organization (WTO) warned that the US tariffs could reverse global goods trade growth in 2025, reducing it from a projected 2.7% increase to a 0.2% decline. In a worst-case scenario, global trade could decline by 1.5%, weakening GDP growth to just 1.7%. …The unpredictability of current trade policy shifts is making reliable forecasting difficult.
VANCOUVER, BC – West Fraser Timber reported first quarter results of 2025. …First quarter sales were $1.459 billion, compared to $1.405 billion in the fourth quarter of 2024. First quarter earnings were $42 million, compared to a loss of $62 million in the fourth quarter of 2024. The fourth quarter included a non-cash impairment loss of $70 million. …First quarter Adjusted EBITDA was $195 million compared to $140 million in the fourth quarter of 2024. ..The Lumber segment has experienced a slower than expected start to the year, owing to transportation and weather challenges that have influenced shipments as well as uncertainty related to demand impacts from the U.S. administration’s shifting tariff policies. …The global pulp market has begun to experience disruption with the economic impact of US tariffs creating considerable demand uncertainty in Chinese markets. As such, we anticipate NBSK pricing weakness over the near- to medium-term and a potentially significant adverse financial impact on our Pulp & Paper segment.
President Trump is reshaping America’s timber industry, directing federal agencies to boost domestic lumber production while investigating whether foreign imports pose a national security threat. The US construction market consumes more than 50 billion board feet of lumber annually, with domestic production currently meeting only 70% of demand. Canada fills most of the gap, supplying roughly a quarter of America’s lumber needs. …His executive order instructs the Forest Service and Department of Interior to increase timber sales from public lands. Industry experts, however, question the feasibility of such rapid transformation. Pete Stewart, of ResourceWise, points out significant challenges: “The U.S. would have to build 70 new sawmills to make up the difference.” The geographic reality also presents obstacles. While Southern forests from Virginia to eastern Texas grow 30% more trees than local sawmills demand, forests in the Northwest are already harvesting at capacity. …Critics also question the national security rationale. 
This is the USD 64,000 question. …What we currently know is that Canadian softwood lumber carries a 14.5% tariff rate, which could expand to 34.45% later in 2025. …If we split the difference between the NAHB’s and FEA’s estimates, the average sized new home consumes 34,000 bf of lumber. As such, should the tariff increase to 34.45%. …,Should the administration levy an additional 25% “immigration and Fentanyl tariff” on Canadian lumber (which is currently exempt), the cost/home would rise to approximately USD 1,100/home. …In reality, total wood usage in home construction includes a variety of wood types including softwood lumber, oriented strand board, engineered lumber and plywood. Each category has its own pricing and supply dynamics. One additional point… It is estimated that the repair and remodel (R&R) market accounts for 35-40% of lumber demand while single-family home construction accounts for an additional 35%. …For more on the latest real estate trends, 
President Trump is forging ahead with his aggressive tariff campaign, moving on from “reciprocal” tariffs to the sector-specific tariffs he promised. To do so will involve Trump’s continued application of Section 232 of the Trade Expansion Act of 1962, which allows a president to impose tariffs to protect or bolster domestic industries if there are deemed potential national security threats. What used to be a rarely employed trade provision has been a favorite instrument. The Commerce Department previously launched Section 232 probes into copper and lumber. And earlier this month, the administration started investigating pharmaceuticals and semiconductors. …Softwood lumber is a critical and preferred ingredient for homebuilding, and 30% of it is imported by the US. Homebuilders warn that tariffs on softwood lumber and other materials could further exacerbate the housing affordability crisis. Higher costs of lumber imports could also affect other products, such as furniture and even toilet paper.
The Bank of Canada held its benchmark interest rate steady at 2.75 per cent on Wednesday, ending a run of seven consecutive cuts. The decision, for which the market had given roughly even odds, comes following weakening inflation data published yesterday, and as Canadian and global economies contend with U.S. President Donald Trump’s twisting trade war. In its decision, the Bank noted various signs of the Canadian economy slowing, and outlined two possible scenarios that underline the uncertainty of the trade war. “Consumption, residential investment and business spending all look to have weakened in the first quarter,” the central bank said in a statement alongside the decision. “Trade tensions are also disrupting recovery in the labour market. Employment declined in March and businesses are reporting plans to slow their hiring. Wage growth continues to show signs of moderation.”
A BC economist says policy proposals from the federal parties do not measure up to the scope of Canada’s housing problem. “(Much) of the policy shift is shifting in the right direction. We still have the problem that the concrete policies on the table don’t match the scale of the housing crisis,” Alex Hemingway, with BC Society for Policy Solutions, said. …Hemingway said he vetted the platforms through two questions: what are plans doing to significantly increase the supply of more affordable housing in the non-market sector; and how to address exclusionary zoning that exists in the biggest, most expensive cities. …Despite all the funding promises, it is still difficult to increase density in areas currently zoned for single-family homes. …If Canada is looking for ways to reduce its economic dependence on the US, “dealing with these fundamental issues of housing and exclusionary zoning, should be an economic priority.”
OTTAWA — Wholesale trade, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.3 per cent to $85.7 billion in February, Statistics Canada said Monday. The overall increase in sales came as just two of the seven subsectors posted gains. Statistics Canada said sales in the machinery, equipment and supplies subsector gained 7.1 per cent for the month to $19 billion. All four of the subsector’s industry groups climbed, with the computer and communications equipment and supplies industry group up 11.2 per cent, while the construction, forestry, mining, and industrial machinery, equipment and supplies industry group added 6.8 per cent.
Lumber futures fell toward $580 per thousand board feet, sliding further from a two-and-a-half-year high of $685 on March 24th, reflecting a steep decline in construction demand amid disruptive trade policies. The US decision to raise duties on Canadian softwood lumber to roughly 34% has sparked significant uncertainty and raised homebuilding costs, prompting builders to delay projects. Concurrently, Canadian production has been restricted by widespread sawmill closures, diminished timber stocks due to the mountain pine beetle, and tightening forestry policies in key regions like British Columbia, resulting in a surplus that further drives down prices. While there is a gradual shift toward lower-cost Southern Yellow Pine from the US South, logistical and technical hurdles limit its ability to fully offset the reduced Canadian supply. Market participants are adjusting to lower demand expectations amid ongoing trade tensions and a slowing construction sector.
Tariff uncertainty continued to weigh on Vancouver’s housing market in March, deepening the slowdown in activity. Escalating US trade actions have fuelled fears of a recession, job losses and equity market volatility, pushing many potential buyers to the sidelines. The latest data from the Greater Vancouver and Fraser Valley real estate boards showed a deepening of the sales pullback in March. MLS sales fell 17.6% year over year. …The severe drop in home sales aligns with declining business confidence, which has plunged to record lows—a pretty good bet that weak confidence is playing out in housing. With sales held back, inventory has ballooned. Active listings were up 43% year over year and marching higher. …Meanwhile, after recording a surplus in merchandise trade balance for two consecutive months, Canada’s trade balance shifted to a deficit in February as exports retreated significantly following a frontloading of US imports.
WASHINGTON — Americans’ trust in President Trump to bolster the US economy appears to be faltering, with a new poll showing that many people fear the country is being steered into a recession and that the president’s broad and haphazardly enforced tariffs will cause prices to rise. Roughly half of US adults say that Trump’s trade policies will increase prices “a lot” and another 3 in 10 think prices could go up “somewhat”. …While skepticism about tariffs is increasing modestly, that doesn’t mean the public is automatically rejecting Trump or his approach to trade. …Not quite 100 days into Trump’s second term in the White House, people around the country are bracing for possible disruptions in how they spend, work and live. The US economy remains solid for the moment with moderating inflation and a healthy 4.2% unemployment rate, yet measures such as consumer confidence have dropped sharply.
The European pulp and paper industry is struggling to assess the possible impact of tariffs. …Europe has a marginally negative trade balance with the US for pulp and paper. In 2024, it imported 2.6 million tonnes of P&P from the US. In the same year, it exported 2.3 million tonnes of P&P to the country. The largest trade deficits appear to be around pulp (-975,000 tonnes) and containerboard (-310,000 tonnes, mostly kraftliner). On the other hand, Europe has a surplus in graphic paper and cartonboard sales. …“The only certainty we have is that there will be negative consequences for businesses on both sides of the Atlantic. Trade wars are always detrimental for consumers, but we are a ‘made in Europe’ industry, with local capacities to meet the European demand,” he added. …Most market participants believe the stuttering trade war initiated by Trump will further hurt the already stagnating European economy.
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February 2025 Southern Pine lumber exports (treated and untreated) were up 4.7% to 40.8 Mbf over January but were down 15% over February 2024, according to February 2025 data from the USDA’s Foreign Agriculture Services’ Global Agricultural Trade System. When looking at the report by dollar value, Southern Pine exports are down 4% compared to the first two months of 2024 at $32 million. Mexico led the way at $8.4 million, followed by the Dominican Republic at $6.7 million, and Canada at $3.3 million. The total global value in February, however, hit a five-month high of $16.5 million. Treated lumber exports, meanwhile, were down 8% to $18.3 million through the first two months of 2025 compared to a year ago led by Jamaica at $3 million, the Leeward-Windward Islands at $2.6 million, and the Netherlands Antilles with $2 million.
NEW YORK — Associated General Contractors of New York State CEO Mike Elmendorf says that under the tariffs proposed by President Trump, the cost for any kind of construction could further skyrocket. “When tariffs go on a material that is sourced from outside the United States, a funny thing happens,” Elmendorf said. “In many cases, domestic producers or suppliers of that material raise their price too because they can. Not as much as the tariff, but it sort of, it pushes everything up.” …Canadian lumber is one of the most critical imports needed for U.S. construction. “Especially the builders up in Western New York are concerned it’s going to affect them quicker and harder than the rest of the state,” said New York State Builders Association Executive Director Mike Fazio. Elmendorf said what might be an even bigger issue than the tariffs themselves is the uncertainty surrounding them.” 
Marie Fallon, the general manager of AR Chambers Supply in Lawrenceville, is nervous about the future of her business. The threat of tariffs has prices fluctuating and she’s worried her supply sources are at risk. …As President Donald Trump’s international trade war rages on, Pennsylvania homebuilding and construction businesses are weathering the dizzying pace of cost increases and then abrupt pauses in tariffs as they try to ensure that long-term projects are completed. Pennsylvania is highly dependent on foreign countries for construction materials, with 63% of the state’s wood imports, 66% of its iron and steel, and 68% of its aluminum coming from Canada and Brazil. …Despite the whiplash changes, some in the industry see the new tariffs as good for the long-term outlook. Hodgkiss Lumber owner Jon Hodgkiss sees Trump’s tariffs as simply a temporary negotiating tactic that will give the US better trade deals.
