"It Will Take Time to Rely on Domestic Production in the U.S."
After U.S. President Donald Trump ordered an investigation into the national security impact of lumber imports, lumber prices hit their highest level in two and a half years.
On the 3rd (local time), according to the Chicago Mercantile Exchange (CME), the March delivery lumber futures price closed at $654 per 1,000 board feet (bf), marking the highest level since August 2022, two and a half years ago.
The recent surge in lumber prices appears to be due to President Trump's directive on the 1st to investigate the national security impact of lumber imports, signaling the start of tariff imposition procedures. Bloomberg News, citing anonymous sources, reported that this investigation will review whether countries such as Canada, Germany, and Brazil are supplying lumber to the U.S. market at excessively low prices, thereby harming national security.
Lumber has been a consistent source of trade conflict, especially between the U.S. and Canada. The U.S. has claimed that the Canadian government supports its domestic lumber industry by setting low logging fees and has imposed tariffs on Canadian lumber.
Experts predict that President Trump has turned lumber trade into a "national security issue," and that Canada's forestry industry will suffer serious damage in the future. Sean Stewart, a researcher at U.S. investment bank TD Cowen, diagnosed, "Canada has been trying to reduce its dependence on U.S. protectionist measures in the lumber industry, but it remains sensitive to trade barriers."
It is expected to take additional time for the U.S. to replace imported lumber with domestic supply. Crystal Gobin, senior economist at Forest Economic Advisors, forecasted, "To completely replace foreign-imported lumber, expanding new facilities for processing raw timber is essential, and various constraints will be encountered during this process." She added, "During the COVID-19 period, when lumber prices surged and demand for home renovations increased, it took about three years for facilities built then to reach full operation. Considering infrastructure development related to lumber processing facilities, it will take several more years."
However, some, including the U.S. Lumber Coalition, welcome President Trump's recent move. Andrew Miller, CEO of lumber product seller Stimson Lumber, said, "It will help mitigate the damage to domestic companies caused by unfair practices of trade partners."
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