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U.S. moves to double Canadian lumber tariffs

woodworkingnetwork.com

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Re: U.S. moves to double Canadian lumber tariffs

#61

Post by Matticus_Rex »

kokanator wrote: post #56
lhorie wrote: post #41

Earlier quoted context omitted.

> Allow these timber companies to ship our timber overseas to create an intentional artificial shortage ( yes it is documented ). Am I understanding right that this would mean US would be incentivized to not export lumber (since domestic demand would grow in response to the increase in canadian lumber prices), and conversely, Canada would just fill the export gap left open by the US, leaving Canada in a stronger, mor…

I am having a difficult time wading through current "shortage" links to find the original information. However, here is the gist. - The inventory of raw timber ( the type you see in log yards ) has grown too large. - Lumber mills are lowering the amount they will pay for raw timber as a result. As well as the rest of the end lumber market. - This causes timber companies profit per foot to drop. - The timber companies…

So you're suggesting what, exactly? It looks like you're making an emotional point based on some kind of national stake in resources. But it's not "our" timber -- it's the timber of some people who worked and invested in the capacity to cut it. If domestic timber prices are lower than foreign timber prices, making it harder for them to export timber just hurts the industry more. They're not sending it overseas to increase domestic timber prices; the domestic market has a glut, so foreign markets are willing to pay more -- that's how markets work, and interference in that process being bad for both domestic and foreign market participants is one of the few things most economists of all stripes are usually in consensus about.

Re: U.S. moves to double Canadian lumber tariffs

#62

Post by Matticus_Rex »

nightowl_games wrote: post #48
nafizh wrote: post #30

Incredible. Instead of putting tariffs on Chinese cheap stuff that most people can get by without, US is putting tariff on one of the main exports of its closest allies.

You should see what the Koch brothers have down to our oil industry and politics!

The Koch brothers actually are against all or nearly all tariffs, incidentally (like most economists).

Re: U.S. moves to double Canadian lumber tariffs

#63

Post by greeneggs »

kokanator wrote: post #56
lhorie wrote: post #41

Earlier quoted context omitted.

> Allow these timber companies to ship our timber overseas to create an intentional artificial shortage ( yes it is documented ). Am I understanding right that this would mean US would be incentivized to not export lumber (since domestic demand would grow in response to the increase in canadian lumber prices), and conversely, Canada would just fill the export gap left open by the US, leaving Canada in a stronger, mor…

I am having a difficult time wading through current "shortage" links to find the original information. However, here is the gist. - The inventory of raw timber ( the type you see in log yards ) has grown too large. - Lumber mills are lowering the amount they will pay for raw timber as a result. As well as the rest of the end lumber market. - This causes timber companies profit per foot to drop. - The timber companies…

> The overall point is OUR resources were exported at a loss so OUR prices would increase. Forests are part of the wealth of our country. Letting a timber company send it overseas to increase domestic timber prices should be illegal.

The same argument applies to cars, and to everything else we make or harvest. Should we ban all exports? (Please, no, it is a bad idea.)

Re: U.S. moves to double Canadian lumber tariffs

#64

Post by 908B64B197 »

dukeofdoom wrote: post #58

Maybe China will step up and take in the extra lumber. Canada increasingly relies on exports to China anyway. Canadians are holding joint military exercises with them. And Chinese investors are buying up prime property in Canada. Nothing wrong with it. Just the way the cookie crumbles.

> Nothing wrong with it.

Pierre Trudeau was the one who opened trade with China. He was also a close personal friend of Fidel Castro. Interesting how the son is following in the footsteps toward authoritarianism.

Re: U.S. moves to double Canadian lumber tariffs

#65

Post by hourislate »

kokanator wrote: post #11

Policy bankrupts large swaths of the logging industry. We create restrictions that substantially increase the cost of harvesting timber on public forest lands ( and add fuel load btw ). This has left major land owners as our primary source of timber ( read monopolistic ). Allow these timber companies to ship our timber overseas to create an intentional artificial shortage ( yes it is documented ). I know, let's solve…

>Policy bankrupts large swaths of the logging industry.

Just speculating here but it's probably the big guys / Multi National lobbying the US Gov for tariffs knowing full well they can can manage since they have assets on both sides of the border and drive the Independents and little guys out of business causing more consolidation and getting rid of any potential competition. It's the same as the Rich advocating for higher taxes, trying to keep less people from getting rich. I know a few guys in the Oil/Blending business and they are under constant assault from the Majors who keep advocating for more and more regulations hoping to bankrupt the smaller players and consolidating their grip on the Industry. You can't take anything anymore at face value, there is always an angle.

Re: U.S. moves to double Canadian lumber tariffs

#66

Post by hedora »

For reference, the base price/square foot of new construction increased 20% when Trump introduced these tariffs.

He also tariffed Chinese concrete at the same time.

The reason it went up so much is (like any other business), contractors and manufacturers need to preserve their profit margins, multiplying the impact of the tariffs for new home builders.

It also allowed domestic producers to hike their prices (which they did). Also, the tariffs caused many substitutions of slightly more expensive (but now cheaper) materials, leading to bizarre shortages and more price hikes.

Then, covid hit and now this. It’s a complete disaster.

Is the department of commerce actively trying to get Trump back in in 2024, or do they just like inflation, homelessness and high interest rates?

Re: U.S. moves to double Canadian lumber tariffs

#67

Post by ericmay »

bobthepanda wrote: post #52
danans wrote: post #26

Earlier quoted context omitted.

> Why not build houses using concrete/cement? Partially because until recently, wood was the most plentiful and cost-effective building material in parts of the US. It is far more seismically resilient than brick or concrete. It is also much easier to modify if you want to add a window or other opening - cutting an opening in a concrete or cinder block wall is much harder. Wood, when responsibly harvested, also seque…

There have been recent developments in wood skyscrapers for the benefits you mentioned, so I would bet wood only gets more popular.

We don’t even need to build those at all… let alone with wood.

Re: U.S. moves to double Canadian lumber tariffs

#68

Post by Matticus_Rex »

nightowl_games wrote: post #44
peeters wrote: post #39

Earlier quoted context omitted.

This was all over the news. That said nobody in Canada was expecting Biden to be less protectionist, it was clear he was cut from the same cloth as Trump as far as his thoughts on globalization and allies went.

I dont think the historical arguments about Globalization hold up in a post-covid world. We are seeing a massive CPU and GPU shortage. TSMC is a nexus of world trade. We saw a massive Suez canal blockage. The merits of locally produced goods are far more apparent now than ever before. We are in a new age.

Given the estimated gains of globalization just in economic terms (to say nothing of worldwide economic stability in most situations), which are in the 14-figure range, there's significant doubt here. Yes, there's likely room for things to be made in more than one place in many instances. But global comparative advantage is still the single greatest contributor to rises in global standards of living. Billions of people have been raised from extreme poverty due to globalization in the last few decades.

Those shortages we occasionally get are market opportunities that will encourage new market entrants. We don't need to attack globalism to get redundant production.

Re: U.S. moves to double Canadian lumber tariffs

#69

Post by Haemm0r »

Currently those tariffs have a big impact on the markets in Germany, Austria and others in Europe too. According to the media the US is buying wood at large [e.g. 1] in combo with local companies trying to stock up prices for wooden build home increased 20-30% in the region. If you talk to local carpenters (Austria) lead times are a roulette game and prices change daily.

The post-covid effect may complicate things furthermore.

[1] https://www.bloomberg.com/news/articles/2021-05-12/u-s-lumbe...

Re: U.S. moves to double Canadian lumber tariffs

#70

Post by vkou »

ncann wrote: post #32
vkou wrote: post #20

Earlier quoted context omitted.

This is a great narrative, until we remember that lumber is a tiny fraction of the price of a house.

It still adds 20-30k when building a new house so not exactly a trivial amount.

Which in practice just means that the land didn't get a chance to appreciate by 20-30k.

Houses cost every spare penny that we can save up to pay for them. Whether the pennies end up going into raw materials, or speculators doesn't really matter to the end purchaser.

If labour and materials became free tomorrow, the cost of housing would remain unchanged, but the cost of land would rise to pick up the slack.

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