Cnn
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President Donald Trump frequently came that “we don’t need” Canada products.
This includes oil, cars and, of course, wood.
“We don’t need the products they have,” said Trump on Thursday by signing decrees in the oval office. “We have all the oil you need. We have all the trees you need.
While trees are generous in the United States (we have 300 billion), economists and house manufacturers claim that America does not currently have industrial capacity to meet demand and taxes, or worse , the Cup – Canadian imports could further exacerbate the affordability of the wealth of current housing.
Tender wood, which comes from pines, spruce, fir trees and other conifers is precious for its light weight, its ouvability and its strength.
As such, its applications are vast, but it is a critical ingredient in the American industry for the construction of houses: generally, the skeleton and the skin of the houses – the framing, the roof and the seat – are made up of soft wood wood.
These bones could soon reach a higher cost, exacerbating more the problem of the affordability of the house. Trump has just announced a 25% rate on practically all imported products (there has been a size of 10% on energy imports) of Canada, where the United States is obtaining around 30% of the wood of soft wood that he uses every year. Trump also imposed a 25% rate on Mexico imports and an additional 10% on imports from China.
However, due to a conflict of several decades between the two neighboring countries, the flexible wooden tax tax may not stop at 25%. These imports are already subject to compensatory and anti -dumping rights of 14.5%.
The Trump administration said on Saturday that prices had been designed to stop the flow of undocumented immigrants and fentanyl in the United States.
“Our industry is strongly based on predictability,” said Nick Erickson, principal director of housing policy for FIRST Minnesota housing, a commercial organization that represents manufacturers, renovators and other companies in the North State.
“Whether it is wood rates or prices on any other import, they may have an impact on the supply chain,” said Erickson. “And in the past we have seen these wood prices, these are paid by new house buyers at the cost of their house.”
In the United States, housing has become more and more unaffordable in recent history, because the supply has taken demand. And this demand has become increasingly increased in recent months, because hurricanes and forest fires have destroyed thousands of houses in the United States.
Composed which was a “scarcity and an acute and sustained increase in the costs of building materials”, according to the National Association of Home Builders.
And the prices would exacerbate these rising costs more, wrote the organization.
Of the 184 billion dollars estimated by goods which are devoted to a new unified and multifamilial construction in 2023, around 7%, or 13 billion dollars, were imported, according to the NAHB estimates.
Wood, at 8.5 billion dollars in imports, represents the part of the lion, according to the NAHB, which noted that 70% of these wood imports came from Canada.
And it is not only wood at risk of prices: 71% of $ 456 million imported from lime and gypsum (which are used for dry partitions) come from Mexico in 2023.
Taking into account other raw materials and components imported from Canada, Mexico, as well as China (especially steel, aluminum and house devices already subject to prices), Trump’s new prices could increase the Cost of building materials imported from 3 billion to $ 4 billion, noted the NAHB.
“This would then make the conditions for the affordability of housing more difficult,” said Robert Dietz, chief economist of the NAHB.
History has shown that it was.
In 2006, the flexible wooden wood agreement from the United States allowed Canadian provinces to collect export taxes on wood bought by American companies.
This agreement, which was active until 2015, led to a drop in exports of tender wood of almost 8%, American wood producers earn $ 1.6 billion and American consumers losing $ 2.3 billion , told CNN Business Rajan Parajuli, Associate Professor of NC of Economics and Forest Policy.
“The losers will always be consumers with a limited advantage for national producers,” said Parajuli, noting that producers who import materials end up transmitting some of these additional costs to consumers.
Extend a “time” industry
If it is true that the United States has a lot of trees (including around 300 billion), economists and house manufacturers warn that it would be far from easy for domestic wood to fill the gap.
First and foremost, not all woods are created equal or adapted to the needs for building houses.
But perhaps more importantly, the expansion of an industry does not occur overnight, said Dietz.
It takes regulatory approval to open a new sawmill, which is necessary to transform wood into wood. Wood, he said, has its own challenges because there are often harvest limits.
Then there are regulatory requirements to develop access roads.
“At various stages of the production process, there are very limiting factors,” he said. “This does not mean that it is impossible to increase a national industry, but it takes time. Political refinements are needed, and what we have often seen in the natural resources and construction sectors, is also required to combat shortages of interior labor. »»
The construction industry has had a shortage of skilled labor in progress for a decade, he said.
“The industry, during a given month, is short of around 300,000 workers, and similar constraints apply to sawmills and wood harvest,” he said. “There is the economic question of if you are going to increase the production of wood of work or any other type of building materials on a full labor market, which other sector will you produce less?”
A salient example can be taken from very recent history: when the wood prices have skyrocketed in the middle of a boom to buy a pandemic house.
The price of soft wood wood has gone from about $ 350 per thousand feet in the board to more than $ 1,500 per thousand feet, he said.
“But when we look at data elements such as the use of wood production in the sawmill industry, this has not really increased,” he said. “Some of the reason is that, like any other industry, there is a large amount of fixed costs.”
However, even at a time when prices are looming and dozens of pressures began the American housing industry, some house manufacturers are optimistic, especially on the potential of the Trump administration to further facilitate regulations.
“This shortage of housing in America really created this interesting bipartisan (where all parties) unite on this concept of increased the affordability of housing and exemption from regulatory help, to raise obstacles to all levels of Government for the production of new housing required, “said Erickson, housing first Minnesota. “It has been going on for about two years, and it’s crescending.”
