Lumber futures dropped below $555 per thousand board feet, hitting a nine-month low, as Canada’s retaliatory tariffs on US goods took effect and dampened demand. Ottawa imposed counter-tariffs of 25% on US lumber and 50% on plywood in response to US duties on a range of lumber-related products.
US forestry groups have long argued that Canada distorts the lumber market because 94% of Canadian forestland is publicly owned, compared with 58% privately owned in the US. They say this gives Canadian producers a cost advantage and enables them to sell lumber at lower prices.
The dispute is now weighing on the forest sector in both countries. Selling prices for lumber jumped immediately after the tariff announcement, further suppressing demand. The impact comes at a seasonally important time: fall is typically strong for renovation activity, but elevated prices are restraining the sector.
At the same time, US housing activity remains weak. Spending on lumber-intensive single-family home construction fell 3.2% in July, while high mortgage rates continue to pressure prospective homebuyers and curb homeownership.