Meanwhile, How's Trump's Lumber Tariffs Doing?

In April 2017 the US Commerce department announced tariffs on Canadian lumber of between 3% and 24%. Then in June they announced another 7.7% tariff on lumber. Canada is the world's largest exporter of lumber and the US gets about 33% of its lumber from Canada.

Now, this:

With Lumber in Short Supply, Record Costs Set to Juice Home Prices
A lumber shortage has pushed prices to record highs as builders stock up for what is expected to be one of the busiest construction seasons in years.

Builders say the higher lumber costs are making homes more expensive. Lumber prices started rising last year after fires destroyed prime forests and a trade dispute between the U.S. and Canada restricted supplies. Now a shortage of railcars and trucks is forcing builders to pay even more. [comment: I wonder if the steel tariff will drive up the cost of producing trucks and railcars?]

“We are in a lumber supply crisis,” said Stinson Dean, a broker in Kansas City, Mo., who ships wood from sawmills to lumber yards, in a note to clients. “None of us have experienced a market like this.”

Marc Towne of Classic Homes, which builds midrange to high-end houses in Colorado Springs, Colo., said he is spending $8,500 more on lumber for a typical home than a year ago, an increase of almost 40%. The company’s passing on about half the cost to buyers for now while it waits to see if lumber prices fall.

Prices for common building varieties like spruce and southern pine are at or near records, according to price-tracking publication Random Lengths. March-dated lumber futures at the Chicago Mercantile Exchange hit a record of $532.60 per 1,000 board feet last week after climbing more than 50% in 14 months.

That run-up began with a trade dispute between the U.S. and Canada, which provides about a third of U.S. timber, leaving many dealers hesitant to restock at elevated prices. The Trump administration eventually instituted tariffs of 20% or more on Canadian sawmills.

With Lumber in Short Supply, Record Costs Set to Juice Home Prices

 

Sorry, but no. That's not how it works. If costs and prices go too high, consumption decreases. Manufacturing does not "gear up" when consumption decreases. Wages almost are always the laggard in the economic equations. They are the last thing to be affected.

Wages increase when there is a shortage of labor and unemployment is at historic lows.

 

In November, the Department of Commerce imposed a 20.83% tariff on shipments of softwood lumber from Canada. While the move was forecast to spur new jobs and increase domestic lumber production, it caused the price of lumber (https:// www.nahb.org/en/research/housing-economics/construction-statistics/national/framing-lumber-prices.aspx) to jump nearly 15%. "Those costs have largely been passed along to consumers, and you've seen new home prices touch new highs," Terrazas said.

It added $6,000 to $10,000 to the cost of a median-priced home, he said.



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This is obviously wrong. Consider how much wood is used to build a house. No way is there only $1,000 worth of wood being used to build a house!

Sent from my Pixel 2 XL

 

OK, are/were those prices "near record levels?"

Sent from my Nexus 7 using Tapatalk

 

OnlyaSinner, do you figure that paper prices, cardboard prices and other paper-based products will increase in price due to the lumber tariffs?

 

Impact of the Canadian Lumber Duties on the U.S. Economy in 2018
By Paul Emrath

On November 2, 2017, the Commerce Department announced its final decision to impose duties averaging 20.83 percent on Canadian softwood lumber shipments into the U.S. The impacts of these duties on the U.S. economy next year will include increased production by U.S. sawmills, reduced imports from Canada, and higher prices paid for lumber by consumers in the U.S., which in turn will lead to a reduced volume of new residential construction. The National Association of Home Builders (NAHB) estimates that the bottom line impact of these effects in 2018 will be a net loss of

• $576.9 million in wages and salaries for U.S. workers,
• $404.0 million in taxes and other revenue for governments in the U.S., and
• 9,370 full-time U.S. jobs.

The jobs are measured in Full Time Equivalents (enough work to keep a worker employed full-time for a year, based on the average hours worked per week in each affected industry).

Impact of the Canadian Lumber Duties on the U.S. Economy in 2018