The White House was right to act by issuing an executive order. This order will address the national security aspects of forestry products imports while increasing domestic output. This directive is aimed at the acute dependence on foreign sources, particularly Canada for softwood lumber. So today, more than 85% of total U.S. softwood lumber imports originate from Canada.
At stake is the 14.5% duty the U.S. currently imposes on Canadian lumber. This rate may increase to 34.5% later this year, if allowed to do so by a necessary regulatory review from the Department of Commerce. Read on to learn why homebuilders and industry experts are concerned by this latest jump. In April, softwood lumber prices were up 23% from last year, adding to their alarm. The unprecedented price spikes and volatility of these prices has put even more pressure on the already distressed U.S. housing market.
According to the National Association of Home Builders (NAHB), lumber futures prices skyrocketed in January of 2025. This increase is spurred by dread of higher tariffs as well as the upcoming threat of large-scale sawmill shutdowns across North America. This place directly drives up construction costs. For luxury multifamily dwellings, that share can reach as high as 18%! Lumber costs can make up a large share of these expenses.
With the national median-priced home now well over $460,000, it’s increasingly beyond the reach of almost 100 million households. Increased costs for produced-in-Ontario lumber are impacting home-building, home-renovating and interior work and fencing. In large part, the U.S. housing market is currently facing an unprecedented affordability crisis.
You see, according to industry experts, increasing tariffs along with continuous supply uncertainty creates a dangerous cocktail. Such factors could lock in scores of new development for decades. That would be a big deal because Canada provides three out of every four logs and lumber that U.S. builders use. This reliance puts developers in a precarious situation when they require consistent and timely access to materials.
Steve Martinez, president of Tradewinds General Contracting, supported this notion, testifying to the burdens shifting lumber prices created.
“The unpredictability of lumber prices adds serious complexity to planning and budgeting.” – Steve Martinez
This ambiguity makes it difficult for contractors to effectively plan projects. It further complicates budget forecasting as they try to maneuver through a difficult market environment.