Investing.com - While it's too soon to say how the Trump administration's bevy of new tariffs will impact various industries and the economy at large, a tariff on Canadian lumber import s imposed in late 2017 is certainly being felt by U.S. homebuilders.
After a year of investigation, the U.S. imposed a tariff of 20.8% on imports of Canadian softwood lumber, a key ingredient in the construction of new homes.
The tariff was meant to punish Canadian suppliers, who were judged to be selling below fair market value in the U.S., where they supply 95% of all imported lum ber.
The homebuilders association says the tariff is the major reason behind record high lumber prices, which have jumped almost 60% since the tariff became a possibility in early 2017.
And that's translated into a $9,000 increase in the average cost of a new single-family home.
In one sense. the tariff has worked. Imports of Canadian lumber fell 15% in the first quarter from a year ago. The problem is U.S. production rose only 3% during that time. Experts say it will take years for the U.S. industry to ramp up production enough to compensate for the lost imports.