US homebuilder confidence remains low as permits slide, but expectation of an interest rate cut boosts future sales expectations. In other Business news: the future of Domtar’s Glenwood, Arkansas sawmill is in question; and UPM extends its pulp mill closures in Finland. Meanwhile: AF&PA joins trade-group opposition to proposed US rail merger; and the American Journal of Transportation opines on Trump’s tariff war impact on trade, trucking and home ownership.
In Forestry/Wildfire news: Canada’s growing Wildland Urban Interface increases fire danger; what to know about the newly created US Wildland Fire Service; and wildfires continue to rage in Oregon’s Lane County; as fire bans are lifted for northern Vancouver Island. Meanwhile: Plilomath, Oregon adapts with mass timber; the Canadian Wood Council features Toronto’s Limberlost Place; and the BC Institute of Technology advances careers in the lumber and sawmill sector.
Finally, a US Lumber Coalition commentary claims most of lumber duties paid by Canadian mills will go into the US Treasury.
Kelly McCloskey, Tree Frog News Editor
Although we are skeptical how effective the C$500 million in “transition” funding will be, the C$700 million in loan guarantees, which are clearly designed as a short-term lifeline for companies to weather the storm, seem pretty meaningful to the Canadian industry at first glance. …If Canadian producers were to simply absorb the incremental duty rate increase, using today’s FOB price for most Canadian softwood lumber and last year’s export volumes to the US translates to a “just pay it” cost of C$1.6-1.7 billion in additional duty payments over the next 12 months. Canadian mill operators are not in a financial position to simply absorb an additional 21-percentage-point increase in duties, so this is an extreme estimate of the true cost. Mills will curtail output rather than continue producing at heavy losses until prices adjust accordingly. Additionally, there is usually some degree of passthrough from the buyer to the seller.
The softwood lumber trade dispute between the US and Canada, which has led to ever-higher US import duties on Canadian lumber, has lasted for decades. …Canadian lumber has the backing NAHB, which sees lumber tariffs as exacerbating high costs for builders and worsening the US housing affordability crisis. There is currently a “Wall of Wood” in the US, after Canadian producers increased shipments to the US in anticipation of the hike to existing ADD and CVD duties in August. Expectations that a large increase in duties would force the closure of Canadian sawmills, lead to shortages, and a boost in lumber prices, overlooked the current weak US demand for lumber, according to Matt Layman. …As US homebuilders now face additional tariff-driven costs, including a 50% tariff on cabinets and vanities, it’s hard to see the lumber demand situation improving, even if more Canadian suppliers have to curtail production or close sawmills.
Lumber futures prices are trading higher after President Trump slapped a 10% tariff on wood imports. Lumber prices have been on a rollercoaster this year, lifted by higher import taxes and tugged lower by the deteriorating housing and construction markets. …Trump’s executive order said the additional 10% tariff, which will also raise the price of lumber from European suppliers like Germany and Sweden, is aimed at protecting domestic sawmills. …Analysts expect the tariff to benefit domestic sawyers and timberland owners, such as Weyerhaeuser and PotlatchDeltic, at the expense of competitors north of the border, who have been losing US market share because of the duties, challenges supplying their sawmills with logs and the abundance of cheap US pine. “Canadian lumber producers’ cash costs should further increase, resulting in capacity closures and a tightening of lumber supply-demand dynamics,” said Michael Roxland of Truist Securities. [to access the full story a WSJ subscription is required]
The Trump administration’s latest tariffs on housing materials could raise the average cost of building a single-family home by nearly $9,000, according to a report Tuesday from UBS. Research analyst John Lovallo said the new levies include “an incremental 10% Section 232 tariff on softwood timber and lumber imports, as well as 25% levies on kitchen cabinets, vanities and upholstered wood products.” UBS estimates the lumber tariff will add about $720 per home, while cabinet and vanity tariffs could tack on another $280. Upholstered wood products were not included in the calculation because they are generally purchased by homeowners rather than builders. “As a result, we now estimate the total tariff impact on the cost to construct an average home at approximately $8.9K,” Lovallo wrote. …“Importantly, we continue to believe this cost impact will be spread throughout the entire housing value chain, with the builders perhaps best positioned to push back on suppliers,” he said.
President Trump ordered fresh tariffs on softwood timber, lumber, and wood furnishings, even as housing groups warn the move could drive up construction costs and furniture-industry advocates said the levies would lead to US job losses. The tariffs may, however, prove more legally durable than Trump’s reciprocal country-by-country penalties because they fall under Section 232 of the Trade Expansion Act, the same legal tool the White House has used to justify duties on steel and aluminum. …The measures hit Canada especially hard because the country already faces duties of more than 35%, a result of recent but separate trade initiatives. Publicly traded lumber producers most directly exposed include Canada’s West Fraser Timber, Canfor, and Interfor. In the US, Weyerhaeuser, Boise Cascade, and Louisiana-Pacific are the closest listed peers, with stocks prices that often move in step with lumber tariffs and demand. US-based furniture retailers may also experience pain, with many dependent on foreign wood.
Canada’s GDP managed to grow for the first time in four months in July, even as the economic impacts of American tariffs began settling in, according to Statistics Canada. On Friday, the agency reported that the gross domestic product increased by 0.2% in July compared with the month prior. In addition, Statistics Canada gave a preliminary estimate for August’s reading to show that the economy was “essentially unchanged in the month.” July’s figure was slightly higher than the 0.1% increase most analysts polled were expecting. …“Canada’s economy is tracking very soft growth in Q3. While not a recession, it’s still an economy that’s bumbling along,” said Derek Holt at the Bank of Nova Scotia. “The combined effect leaves us tracking growth of only about 0.7 per cent at a seasonally adjusted and annualized rate in Q3 — that’s hardly much of any rebound from Q2.”
Lumber futures traded above $580 per thousand board feet in September, holding above earlier month lows as supply tightened and housing demand showed signs of renewal. Major producers such as Interfor reduced output through maintenance and shift cuts and mill idling while Canadian softwood flows remained constrained by tariff uncertainty which compressed prompt availability. Expectations of Fed further rate cuts later in 2025 encouraged forward looking builders to replenish inventories. New single family sales rose 20.5% to an 800k seasonally adjusted annualized rate in August which was the largest monthly rise since August 2022. Existing home sales held at a 4.00m SAAR in August and housing inventory stood at 1.53m units equivalent to 4.6 months of supply.
Lumber futures fell back below $570 per thousand board feet in September, reflecting the struggles in the US housing market. Builders are scaling back new construction amid a recent inventory glut and growing economic uncertainty, while the Trump administration’s fluctuating stance on tariffs for imported lumber over the past few months has added further volatility. Meanwhile, a significant gap remains between the number of homes for sale and the demand from Americans seeking housing. Affordability challenges have caused many buyers to withdraw in recent months, keeping construction activity muted throughout 2025. However, recent cuts in US interest rates, along with prospects of further easing, have helped curb some of the losses. Without a substantial increase in new home demand, the subdued pace of construction is likely to persist, as builders continue to compete with the steadily growing inventory of existing homes. [END]
Major concerns are being expressed on both sides of the border regarding the higher US duties on Canada’s softwood lumber. …The current 35.19% duty, along with any steeper tariff, is detrimental to US homebuilders and homebuyers longer term, warns Rose Quint, of NAHB Survey Research. Higher mortgage rates of 6% to 7% since 2022 have already weakened housing demand and caused lumber prices to edge downwards. The real effect of tariffs might be delayed by wholesalers having stocked up building materials earlier in the year to avoid higher tariffs “Years of building above and beyond our traditional baseline is required to make up the 1.5 million deficit that we have in new housing units,” Quint adds. …Affordability challenges already existed and will be further worsened by the higher costs. …The overriding hope among the Canadian producers and American homebuilders is that a suitable agreement will be reached between the US and Canada. 
Higher duty rate and possible additional tariffs have transportation modes on edge. The softwood lumber dispute threatens to have repercussions on various transportation modes, particularly trucking. “Our members are saying their business is still okay, even with the softer rates due to mill overcapacity, but they’re worried that if anyone pushes on this wall with more tariffs, there’s nothing to hold it up,” says Dave Earle, the BC Trucking Association’s CEO. …Trucking has already been dealing with the overcapacity that was put in place for the greater demands for deliveries for most everything during the pandemic but has not subsided. …In terms of rail services, CPKC has seen its forest product shipments rise this year to date based on revenue ton miles. …At the Port of Vancouver in British Columbia, the potential to export more lumber is significant with approximately half of last year’s containers leaving the port empty. 
BURNABY, BC — Interfor announced that it has entered into an agreement with a syndicate of underwriters led by RBC Capital Markets and Scotiabank, under which the Underwriters have agreed to purchase, on a bought deal basis, 12,437,800 common shares of the Company at a price of $10.05 per Common Share for gross proceeds of $125 million. The Company has agreed to grant the Underwriters an over-allotment option to purchase up to an additional 15% of the Common Shares. …The Company intends to use the net proceeds of the Offering to pay down existing indebtedness and for general corporate purposes. …Proceeds of the Offering are expected to further enhance Interfor’s flexibility to navigate near-term market volatility. The Offering is scheduled to close on or about October 1, 2025.
Weakening U.S. housing construction has put another dark cloud over BC’s forest industry, increasing the likelihood of more mill shutdowns and layoffs. Lumber prices flatlined in recent weeks due to weak demand, just as new, higher duties in the Canada-U.S. softwood lumber dispute took effect. That means BC mills are operating at losses of up to US$220 per thousand board feet of two-by-fours, according to industry consultant Russ Taylor. …Taylor said market conditions during September are typically favourable for sawmills, but they’re decidedly negative this year. His forecast is that they will remain weak for the rest of the year, which will likely result in mills taking downtime. “We’re seeing it already,” said Kim Haakstad, CEO of the B.C. Council of Forest Industries. “We’re seeing temporary curtailments, we’re seeing extended holiday breaks, we’re seeing reconfigured shift schedules. …Haakstad said Parmar’s recognition of the urgency for change was encouraging.
Housing starts and pre-sales in much of Southern Ontario have earned failing grades and are on track to get even worse, a new study warns — a situation that “should alarm policymakers across all three orders of government.” The report from University of Ottawa’s Missing Middle Initiative compares housing starts and sales in 34 municipalities across the Greater Toronto Area and neighbouring Southern Ontario cities for the first six months of 2025 with the same period from 2021–2024. It found starts are down 40% relative to that four-year average, with pre-construction condo sales plunging 89 per cent and other homes 70 per cent. The reduction in starts has direct employment implications, and the collapse in pre-construction sales, the study says, is “a clear indication that Ontario’s housing situation will get worse before it gets better, and that market weakness is not isolated to the condo market.” …The study paints a similarly bleak picture for the first half of 2025.
President Donald Trump has reignited debate over the nation’s housing shortage, calling on Fannie Mae and Freddie Mac to spur a wave of new home construction. Trump accused large homebuilders of “sitting on 2 million empty lots, a record,” and likened their behavior to OPEC’s control of oil prices. …“I’m asking Fannie Mae and Freddie Mac to get Big Homebuilders going and, by so doing, help restore the American Dream!” The president’s comments come as housing inventory has rebounded from historic lows in 2022, but builders continue to face limited incentives to ramp up construction. …Since taking office, Trump has made housing a central policy focus, including an executive order for emergency price relief and a campaign to pressure the Federal Reserve for lower rates. …Despite Trump’s calls, the mechanics of how Fannie and Freddie might spur more homebuilding remain unclear. 
Average mortgage rates in September trended lower as the bond market priced in expectations of rate cuts by the Federal Reserve. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.35%, 24 basis points (bps) lower than August. Meanwhile, the 15-year rate declined 21 bps to 5.50%. Despite the recent drop, rates remain higher than a year ago as last September saw the lowest levels in about two years. The 30-year rate is currently higher by 17 basis points (bps), and the 15-year rate is higher by 24 bps, year-over-year. …Markets began pricing in rate cuts from the Fed at the start of the month, particularly after news that jobless claims rose while inflation remained modest. On September 17, the Federal Reserve announced a 25 bps cut to the federal funds rate, bringing the target range to 4.00% – 4.25%. Falling mortgage rates have already shown an impact on housing activity. 
Housing is the foundation of the economy. …It’s not a surprise, then, that the Trump administration recently said it was considering declaring the housing crisis a national emergency. The federal government alone can’t solve the housing crisis. That said, the administration could take steps that would meaningfully help make American housing more affordable. …One of the biggest issues is supply. …But 
Cardboard-box demand is slumping, flashing a potential warning about the health of the American consumer given that goods ranging from pizzas to ovens are transported in corrugated packaging. A historic run of pulp-mill closures is also signaling problems for the companies that make corrugated packaging as well as the timberland owners who sell them wood. International Paper, the country’s biggest box maker, announced last month the shutdown of two US containerboard mills, which make the brown paper that is folded into corrugated packaging. …It is a surprising turn in the e-commerce era. Box makers and analysts say demand presently suffers from uncertainty in US boardrooms and export markets because of President Trump’s tariffs as well as from weakening consumer spending. The sputtering housing market has also hurt, reducing the need for moving boxes as well as packaging for building products and appliances. [to access the full story a WSJ subscription is required]
Single-family housing permits slipped for the seventh month in a row, highlighting affordability headwinds and weak demand. While multifamily permits ticked up, the sector’s volatility leaves the outlook uncertain. The split underscores a housing market still under strain, with single-family softness weighing on broader growth prospects. Over the first seven months of 2025, the total number of single-family permits issued year-to-date (YTD) nationwide reached 565,208. On a year-over-year (YoY) basis, this is a decline of 5.7% over the July 2024 level of 599,308. For multifamily, the total number of permits issued nationwide reached 286,836. This is 2.6% higher compared to the July 2024 level of 279,618.
Housing starts in the US fell last month to the lowest since May, as bloated home inventory slowed builders’ appetites to boost production. New residential construction decreased 8.5% last month to an annualized rate of 1.31 million homes, government data released Wednesday showed. The median forecast in a Bloomberg survey of economist was for 1.37 million starts. Meantime, starts of one-family homes fell 7% to an annualized 890,000, the lowest in more than a year. Multifamily construction, which has helped lift overall construction in recent months, also declined, falling nearly 12% to a three-month low. …Traders expect the Federal Reserve to trim interest rates multiple times this year, starting on Wednesday. And separate data out Wednesday showed mortgage rates fell last week to the lowest level in nearly a year, spurring a surge in refinancing.
