Trump looks to open up latest front in tariff war with executive order on lumber

Washington DC - President Donald Trump ordered a probe Saturday into potential tariffs on lumber imports while also pushing for a domestic supply boost, in the latest move threatening to stoke trade tensions.

US President Donald Trump signed an executive order hinting at possible tariffs to come for timber and lumber imports.
US President Donald Trump signed an executive order hinting at possible tariffs to come for timber and lumber imports.  © Collage: SAUL LOEB / AFP & REUTERS

Trump signed an executive order instructing Commerce Secretary Howard Lutnick to start an investigation "to determine the effects on the national security of imports of timber, lumber, and their derivative products."

The study may result in new tariffs being imposed, which would pile on top of existing levies.

The investigation takes aim at exporters like Canada, Germany, and Brazil, with White House officials earlier accusing these economies of "dumping lumber into our markets at the expense of both our economic prosperity and national security."

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Canada for example is among the world's biggest exporters of softwood lumber, with its largest export market being the US.

The probe under Section 232 of the Trade Expansion Act comes days after Trump used the same tool to study copper imports, and after he unveiled tariff hikes on steel and aluminum products.

Speaking to reporters ahead of the announcement, a White House official criticized "bad actors" globally who develop "massive overcapacity" with the help of government subsidies.

The official, who spoke on condition of anonymity, said such dumping caused the world's biggest economy to lose its own manufacturing capacities despite having natural resources.

US consumers likely to feel effects of lumber tariffs

Experts warned that tariffs on lumber will be felt mostly by US consumers, while also negatively affecting the construction industry,
Experts warned that tariffs on lumber will be felt mostly by US consumers, while also negatively affecting the construction industry,  © SAUL LOEB / AFP

While the US has anti-dumping and countervailing duties on Canadian lumber, for example, officials claimed that this was not sufficient to address the problem.

The investigation will consider both imported articles and derivative products like furniture, the official said.

The report must be submitted to the president within 270 days, according to the text of the executive order.

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Trump signed a second executive order on Saturday aimed at increasing US timber production, with the aim of lowering construction and housing costs.

Industry players have warned that imposing new tariffs on timber imports could have the opposite effect, potentially hitting housing affordability.

"Tariffs on lumber and other building materials increase the cost of construction and discourage new development," National Association of Home Builders chairman Carl Harris said after Trump announced possible levies on Canada and Mexico.

"Consumers end up paying for the tariffs in the form of higher home prices," he said.

Cover photo: Collage: SAUL LOEB / AFP & REUTERS

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