Uncertainty regarding tariffs continues to challenge companies across industries. It’s a common theme in every conversation I’ve had with fellow business owners lately: How do we plan, price or grow when the rules are constantly shifting? In our case, the lumber industry got a temporary break—framing lumber from Canada, which makes up over 30% of the US market, was exempt from the original tariffs. That’s good news for now, especially for residential construction. But there’s still no clarity on imports from other key countries like Brazil and China, where tariffs remain in full effect. That could have a serious impact on specialty products like Ipe and hardwood veneers. Other building materials—fasteners, finishes, flooring, and more—are also caught in the middle. …That cost will be passed on to the end user. Businesses like ours don’t have the luxury of absorbing increased costs indefinitely. If we did, we’d be out of business.
There has been a lot of news recently on higher tariffs between the U.S. and its trading partners, including Canada and Mexico. One concern that is top of mind for many LBM dealers is how these new tariffs will affect lumber and other materials sold at yards and stores across the country. How concerned should I be and what action, if any, can I take to protect my business? Responses from lumberyards, full-line building material dealers, and specialty dealers/distributors:
The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%. Since the April Monetary Policy Report, the US administration has continued to increase and decrease various tariffs. China and the US have stepped back from extremely high tariffs and bilateral trade negotiations have begun with a number of countries. However, the outcomes of these negotiations are highly uncertain, tariff rates are well above their levels at the beginning of 2025, and new trade actions are still being threatened. Uncertainty remains high. While the global economy has shown resilience in recent months, this partly reflects a temporary surge in activity to get ahead of tariffs. …In Canada, economic growth in the first quarter came in at 2.2%. …CPI inflation eased to 1.7% in April. …Excluding taxes, inflation rose 2.3% in April.
Economic growth forecasts for the US and globally were cut further by the Organisation for Economic Co-operation and Development (OEDC) as President Trump’s tariff turmoil weighs on expectations. The US growth outlook was downwardly revised to just 1.6% this year and 1.5% in 2026. In March, the OECD was still expecting a 2.2% expansion in 2025. The fallout from Trump’s tariff policy, elevated economic policy uncertainty, a slowdown of net immigration and a smaller federal workforce were cited as reasons for the latest downgrade. Global growth, meanwhile, is also expected to be lower than previously forecast, with the OECD saying that “the slowdown is concentrated in the United States, Canada and Mexico”. “Global GDP growth is projected to slow from 3.3% in 2024 to 2.9% this year and in 2026. It had previously forecast global growth of 3.1% this year and 3% in 2026. …The OECD adjusted its inflation forecast, saying “higher trade costs will also push up inflation.”
Lumber is in the spotlight as the National Association of Home Builders (NAHB) and the US Lumber Coalition disagree over what’s behind the U.S. housing market slump. The NAHB has pointed to tariff uncertainty and lumber prices as being partly responsible. The US’s current anti-dumping and anti-subsidy duty on imported Canadian softwood lumber stands at 14.5%. It could potentially climb later in the year to nearly 35%. “I share President Trump’s desire to create fair and balanced trade across our borders, certainly would bring back as much production as we can,” NAHB CEO Jim Tobin said. “But until we do that, and it will take years and millions of dollars of investment, we need to make sure that we have a reliable, affordable source of lumber.” …The US Lumber Coalition has also been critical of Canada, saying that “ongoing unfair trade practices” by its lumber industry have been “extremely harmful to US lumber producers.”
US market conditions have been lackluster since the Trump tariffs on Canadian lumber were postponed for the second time in early April. …The proposed 25% tariffs were the catalyst for SPF prices rising in the first two months of 2025. …Today, this puts BC Interior SPF mills back near break-even levels at current lumber prices and 14.4% duties with other Canadian regions looking to be marginally profitable. With tariffs in suspension mode, the US market fundamentals have now been exposed – the market is weak and remain weak – and there is too much supply – again! ….The silliness of the Trump administration’s irrational rhetoric as well as biased trade policies will only result in raising all lumber prices to the US home builder, the renovation contractor, and the consumer. How much of the tariffs (or Canadian duties) are passed on to the consumer is the only wild card, but it will likely be the majority.
A pause on some tariffs creates a window for Canadian companies to re-examine their risk profiles and work with brokers to secure needed coverage. Both Bay Street and Wall Street are cheering the ruling from the US Court of International Trade that, at least temporarily, tamps down the 10% tariffs the White House imposed on most countries, and drug-related emergency orders setting 25% tariffs on some goods from Canada and Mexico. …Some companies may use tariff lulls to stock up on certain key materials. …Construction companies, for example, often import flooring products from the US, even though Canadian builders have good access to lumber. For them, stockpiling those materials reduces the economic impacts of both US tariffs and Canadian retaliatory tariffs. …Additional optimism arrived via King Charles III’s Speech from the Throne this week. The document opening Canada’s parliament commits to major economic initiatives, including large-scale increases in housing construction.
Tariff discussions about reducing US dependence on foreign goods became a focus for the second Trump administration. …However, the US forest products industry’s reliance on Canadian wood raises questions about eliminating Canadian wood imports entirely. This piece is the second in a two-part series by the Fastmarkets team. 
New homes development got a shot in the arm this spring with April starts rising in Canada and the United States. Recent reports from TD Economics examined new home data in both markets, finding month-over-month rises in starts for April. In Canada, starts jumped 30 per cent month over month, marking the largest rise since June 2023. Driving growth was the multi-family family segment that saw starts rise 34 per cent, whereas single-family detached home starts gained six per cent from March. …TD noted the “bounce-back” in activity was not unsurprising given levels were so low to start the year. What’s more, housing starts could “be softening,” amid higher construction costs and lower immigration, it cautioned. In the U.S., activity was less robust by percentage growth. Starts there increased less than two per cent month over month.
Weyerhaeuser Company and Firefighter Behavioral Health Alliance (FBHA) today announced an extension of their Fighting Fires Together campaign, a partnership that provides specialized mental health support for wildland firefighters and their families across the Pacific Northwest. Fighting Fires Together, now in its fourth year, addresses the often-overlooked mental health impacts of wildland firefighting in isolated, hazardous and highly stressful conditions. Through a free online resource hub, first responders can find specially designed content, including videos about Post Traumatic Stress Disorder, depression, anxiety and suicide prevention, along with mental health tips, educational articles and contacts for occupationally aware support groups and counselors in Oregon, Washington and British Columbia. Weyerhaeuser’s support for wildland firefighting efforts in the Pacific Northwest began in the aftermath of the Yacolt Burn in 1902, when the company began advocating for Washington’s first forest fire legislation and the funding of community fire prevention education and patrols. 
U.S. home prices will rise steadily over coming years on an expected further decline in mortgage rates, according to property experts in a Reuters survey who expressed a near-unanimous view President Donald Trump’s tariffs would hinder affordable home construction. The same analysts had said three months ago that affordability and turnover in the market would improve, an upbeat outlook hinging on expectations the Federal Reserve will resume cutting interest rates after staying on the sidelines all year. That optimism has since been tempered with Congress passing a sweeping tax-cut and spending bill estimated to add roughly $3.3 trillion by 2034 to an already-enormous $36.2 trillion debt pile, according to nonpartisan think tank the Committee for a Responsible Federal Budget. Long-term bond yields have spiked higher, limiting scope for a decline in mortgage rates.
WASHINGTON, DC – Total single-family home sales are expected to close 2025 at 4.92 million units, with existing home sales accounting for 4.24 million of those units, according to the May 2025 Economic and Housing Outlook from the Fannie Mae Economic and Strategic Research (ESR) Group. Revisions to the home sales forecast were driven in part by the ESR Group’s lower expectations for mortgage rates, which it now forecasts to end 2025 and 2026 at 6.1% and 5.8%, respectively. The latest outlook also projects real gross domestic product growing at 0.7% in 2025 and 2.0% in 2026 on a Q4/Q4 basis. …We now expect the Consumer Price Index (CPI) to rise 3.5 percent Q4/Q4 in 2025, unchanged from our April forecast. Core CPI is expected to rise 3.8 percent Q4/Q4 in 2025 (down from 3.9 percent previously) and 2.6 percent in 2026 (unchanged).
Volatile lumber prices are once again rattling the U.S. housing market, squeezing builders and threatening to exacerbate an already dire affordability crisis. Softwood lumber prices in April surged 23% year-over-year, while futures rose sharply in early 2025 amid fears of increased U.S. duties and widespread sawmill closures across North America, according to the National Association of Home Builders. This has weighed heavily on major homebuilders such as Lennar, D.R. Horton and Toll Brothers, which have all seen their stocks slump this spring. …“The unpredictability of lumber prices adds serious complexity to planning and budgeting,” said Steve Martinez, of Idaho-based Tradewinds General Contracting. …Beyond homebuilding, higher lumber costs are hitting renovations, fencing and interiors. The US Forest Products annual market review found that U.S. lumber production inched up… but demand continues to outpace supply. Environmental regulations, aging forests and labor constraints compound the challenge.
The Producer Price Index declined 0.5% in April, according to data released Thursday by the US Bureau of Labor Statistics. However, of the 10 key commodities in the hardware and building supply space tracked below, only two (millwork and plywood) index lower compared to a year ago. And only one (plywood) declined from March to April. The softwood lumber index increased 8.6% year-over-year. A month ago, the increase was 12.6%. …Construction input prices decreased 0.1% in April compared to the previous month. Nonresidential construction input prices increased 0.2% for the month. “Construction input prices declined in April, but that was largely due to falling energy prices,” said ABC Chief Economist Anirban Basu. “Materials directly affected by tariffs saw sharp price increases for the month. Steel mill product prices, for instance, rose 5.9%, while copper wire and cable prices increased 5.0%.
Builder confidence fell sharply in May on growing uncertainties stemming from elevated interest rates, tariff concerns, building material cost uncertainty and the cloudy economic outlook. However, 90% of the responses received in May were tabulated prior to the May 12 announcement that the US and China agreed to slash tariffs for 90 days to allow trade talks to continue. Builder confidence in the market for newly built single-family homes was 34 in May, down six points from April, according to the NAHB/Wells Fargo Housing Market Index (HMI). This ties the November 2023 reading and is the lowest since the index hit 31 in December 2022. …All three of the major HMI indices posted losses in May. The HMI index gauging current sales conditions fell eight points in May to a level of 37, the component measuring sales expectations in the next six months edged one-point lower to 42 while the gauge charting traffic of prospective buyers dropped two points to 23.
Economic uncertainty has produced a double whammy for the housing market: sluggish home sales and plodding construction. Last month was the slowest April for existing home sales in 16 years — a sharp rebuke to hopes that this spring the housing market would recover after two very sleepy years. In a May survey of builder confidence conducted by Wells Fargo and the National Association of Home Builders, home builder sentiment dropped to a level last seen in November 2023. The problem, as ever, is the cost of housing: Home prices are out of reach for many who would like to buy. And the tariff drama under President Trump has both made it more expensive to build new homes and made the future more unpredictable for would-be homebuyers. The result is a country where builders want to build, and buyers want to buy — but the future is too much in doubt.
Q1 2025 exports of Southern Pine lumber (treated and untreated) were 12% behind the same quarter in 2024 at 122 MMBF, but up 2% over the fourth quarter of 2024. On a monthly basis, Southern Pine lumber exports were down 20% in March over March 2024 but up 4.6% over February 2025. When looking at the report by dollar value, Southern Pine exports are down 7% to $50 million in the first quarter of 2025 compared to the same period in 2024, but down 17% over the fourth quarter of 2024. Mexico led the way at $13.2 million, followed by the Dominican Republic at $10.4 million, and Canada at $4.3 million. The total global value in March hit a six-month high of $18 million. Treated lumber exports, meanwhile, were down 19% compared to the first quarter of 2024 at $28 million and down 6% over the fourth quarter of 2024.
An increasing demand for timber to meet Australia’s housing targets is set to drive a change in focus for one of Australia’s largest forestry regions. The Green Triangle, situated across the southern South Australia–Victorian border, has about 334,000 hectares of plantations, representing 17 per cent of Australia’s forestry industry. The region grows a mix of softwood timber, primarily used in domestic construction, and hardwood, which is often exported as wood chips and used in paper manufacturing. But as Australia looks to meet its goal of building 1.2 million new homes by 2029, investment in softwood is growing fast. “Both the state and the federal governments have incentives in place for industry and private investors to grow radiata pine,” University of Melbourne forest ecologist Rod Keenan said.
New Forests, a global investment manager of nature-based real assets and natural capital strategies, is today announcing its Tropical Asia Forest Fund 2 (TAFF2) has made its first investment in timber processing infrastructure in Vietnam by investing in the Tavico Group (Tavico), one of the country’s leading suppliers of solid wood lumber and logs. Tavico was founded in 2005 as a log trader and sawn timber mill with annual production capacity of 12,000m3 of lumber per annum, which is equivalent to approximately 800 medium sized houses. Tavico has established a 3,200-hectare FSC certified community forestry program with small holder farmers which provides employment and revenue sharing opportunities for local communities. The investment from TAFF2 will look to expand this program for smallholder farmers in Vietnam.