The threat of increased prices is nothing new in the often volatile lumber industry.
In fact, the trade battle between the U.S. and Canada dates back to the 1980s, and duties have been sought five times during that period, according to Random Lengths, an independent publication focusing on the wood products industry.
The most recent agreement was signed in October 2006 and expired in October 2015, with a one-year cooling-off period where neither the U.S. or Canada could file a trade case.
That time frame was meant to allow for negotiations on a new agreement, but when November 2016 rolled around with no new deal, the U.S. Lumber Coalition filed a countervailing and anti-dumping duty petition against Canadian lumber importers. The U.S. International Trade Commission issued a preliminary ruling in January that there is reasonable indication the U.S. industry is hurt by softwood lumber imports from Canada, allowing the trade case to continue.
At this point, it became pretty clear to lumber producers that duties were a possibility, and softwood prices began to climb in anticipation, Ashley Ranslow, director of government affairs for Northeastern Retail Lumber Association said. She said softwood prices have gone up 26 percent since the beginning of the year.
What has transpired so far since the agreement expired is pretty typical, Ranslow said. In previous years when the Lumber Coalition has filed petitions, the dispute has gone to the international trade courts. And in previous years, the U.S. has lost its case, and an agreement has been reached shortly thereafter.
But with no new agreement in the works for now, there’s no way to tell what’s going to happen with wood prices – and, by extension, the cost of building homes, Ranslow said.
“We hope for a new agreement that promotes stability and consistency,” she said.