Concerns Rise Over Potential Tariffs on Canadian Lumber and Timber

Missoula, MT – As the clock ticks down to April 2, when a new set of tariffs on Canadian timber and lumber is set to go into effect, industry experts and business owners are raising concerns about the potential impact on the construction sector and the broader U.S. economy. With the tariffs poised at 25%, the fear is that construction costs could rise, especially given that lumber and wood products account for a significant portion of building expenses.

Lumber and timber are essential materials in construction, making up an estimated 15% of the total cost of building a home, according to the National Association of Home Builders. While the tariffs may have a ripple effect on prices, some experts argue that the impact may not be as severe as initially feared.

Nick Chiasson, co-owner of Montana Custom Millwork in Billings, expressed mixed feelings about the proposed tariffs. Although he doesn’t believe it will directly harm his business, he sees the potential tariffs as a way to help keep the broader timber and lumber industry viable. “When the tariffs come into play, it levels the playing field for American sawmills,” Chiasson explained. “It’s something that could help out bigger sawmills, along with the entire timber industry.”

Chiasson, who has spent years in the sawmilling business, believes the tariffs could benefit the larger U.S. mills by making their products more competitive in the global marketplace. He added that while there might be a slight increase in costs—around 15 cents per board foot of lumber—the overall effect on construction expenses would be minimal unless the demand for housing rises dramatically.

Jason Todhunter, executive director of the Montana Logging Association, echoed Chiasson’s sentiment, noting that while tariffs could increase construction costs by a small margin, they would not cause a significant spike in the price of new homes. “Lumber and wood account for between 4% and 18% of the costs in construction,” Todhunter said. “It’s going to drive the house up a little bit, but if you look at the whole picture, I don’t think it would have as huge of an impact.”

However, the potential tariffs could offer a silver lining for the struggling U.S. timber industry. The American Loggers Council estimates that at least 50 sawmills have closed their doors since the start of 2024, with some industry figures suggesting that the actual number of closures could be much higher. Todhunter added that the number could surpass 100 nationwide, signaling a concerning trend for the U.S. timber sector.

For many in the industry, these closures represent a dire threat to the livelihood of American loggers and sawmill workers. The proposed tariffs, however, may provide a lifeline to struggling U.S. sawmills by making Canadian lumber less competitive. “If the larger sawmills in Montana aren’t buying enough logs to keep the loggers busy and we lose loggers, then our business will lose loggers as well,” said Chiasson.

While the immediate impact of the tariffs remains to be seen, both Chiasson and Todhunter are hopeful that the move will help sustain the U.S. lumber industry in the long run. “The whole point of the tariffs is to bring manufacturing back to the United States and put more money in American pockets,” Chiasson remarked.

At the heart of the debate is the desire to reinvigorate the U.S. lumber industry, which has faced increasing competition from Canadian imports for years. Todhunter pointed out that Canada remains a major competitor for U.S. loggers and lumber producers. “If a tariff goes on them, it makes the U.S. product more attractive and makes a consumer choose that,” he said.

As the tariffs approach, many in the U.S. timber industry are hopeful that the policy will help stabilize the sector, provide a boost to American sawmills, and ultimately contribute to the U.S. economy. However, the full impact will depend on how demand for housing evolves in the coming months. If demand remains steady or increases, the U.S. timber industry may be well-positioned to meet that need, with domestic products receiving a boost in competitiveness thanks to the tariffs.

Ultimately, while the tariffs are likely to raise costs in the short term, they may also offer a much-needed reprieve for U.S. sawmills and loggers, ensuring their survival in an increasingly competitive global market.