US lumber prices, which have already been rising in recent months, could see additional increases following President-elect Donald Trump's proposal to impose 25% tariffs on goods from Canada and Mexico. This move, announced via social media, is part of a broader strategy to address issues related to fentanyl and migrant flows into the US. According to Bloomberg, the news sent lumber futures in Chicago up by as much as 2.1%, reaching $599 per 1,000 board feet, while shares of major forestry companies, such as West Fraser Timber Co. and Interfor Corp., experienced declines. Canada is the largest foreign supplier of lumber to the US, and with rising duties already putting pressure on the supply chain, the addition of tariffs threatens to exacerbate the situation. The US is already dealing with the aftermath of recent hurricanes, which have further strained domestic lumber production.

Kurt Niquidet, chief economist at the BC Council of Forest Industries, told Bloomberg that tariffs on Canadian imports are likely to result in reduced supply and higher prices, directly impacting housing affordability. Jim Tobin, president of the National Association of Home Builders, also weighed in, warning that these tariffs would deepen the US housing affordability crisis. While the US has made strides toward greater self-sufficiency in lumber production, it still heavily relies on Canadian imports, particularly as southern US forests face ongoing recovery from hurricane damage. Crystal Gauvin, a senior economist at Forest Economic Advisors, noted that rebuilding efforts in hurricane-hit areas are slowly gaining momentum, which should support strong lumber sales in late December and into next year, according to Bloomberg.