Earlier this year, the US imposed tariffs on lumber being imported into the US from Canada. This issue is not new and has been hotly contested ever since the NAFTA negotiations in the 90s. The tariffs range from 3% to 24% on specific companies that are particularly egregious. This move is an important development on the industry and cross-border relations.

The National Association of Home Builders estimated that a 15% increase in lumber tariffs will result in a 4% rise in the final price of homes. That would also result in the loss of over 4,000 jobs from carpenters and lumber distribution firms.

On the other hand, some local jobs would increase. Those include domestic lumber suppliers that will be more price competitive.  Also, suppliers around the country of substitutes like ICFs, other concrete and ready-mix materials will also benefit.

Over the long-term, this policy could actually accelerate the move towards steel and ICFs as prominent building materials. These options are stronger, last longer and are considered more environmentally friendly than purchasing timber for home building. There are even many new design fads for steel and concrete that builders might employ.  Some of the recent award winning homes do not use lumber at all and mostly have ICF supplies. Even interior walls that don’t affect the building’s envelope can be framed out of light gauge steel instead of wood. This option has been used by commercial framers for years and is actually considered cheaper and more consistent than using wood in any scenario.

Additionally, some concrete options like insulated concrete form (ICF) walls are now less expensive than a stick frame. That is especially true if energy conservation, R-Value and ICC are considered.  They may achieve LEED certification and NetZero carbon emissions. These are more environmentally friendly and are thus more socially acceptable.

As these extra considerations get factored in, more and more building materials will be on the menu for developers.  This is especially true now that the price of lumber is going up due to the tariffs.

Together, the tariff will have the effect of changing the home construction industry and altering the supply chain. However, the market should not be substantially disrupted.

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