California home builders on Thursday applauded the decision by the U.S. Commerce Department to cut tariffs on Canadian softwood lumber imports in half.
Noting that California builders use “in excess of $6 billion worth of wood a year” in constructing 200,000 new homes and apartments, Sherman D. Harmer Jr., president of the California Building Industry Association and a San Diego home builder, said Thursday’s action is an important step.
“Because California builders primarily build wood-frame homes, the cost of wood is an important part of the ultimate price of a new home here,” Harmer said. “And thanks in no small part to the U.S. tariffs on Canadian imports, the price that builders pay for wood has risen dramatically in the past few years.
Due to tariffs and strong demand for wood in the U.S. and overseas, the cost of framing lumber averaged about $450 per 1,000 board feet in April – up 40 percent from the beginning of the year and at its highest level since July 1999, according to the builders group.
Harmer and other California home builders met recently with top government officials in Washington, D.C., to strongly urge that the tariffs be reduced or eliminated.
The tariffs have long been a sore spot between the U.S. and Canada. The U.S. has said that Canada allows private companies access to government-owned forests, allowing them to undercut American timber producers. Canada challenged the American action at the World Trade Organization and through panels set up under the North American Free Trade Agreement, and a series of decisions this year went Canada’s way.
In the wake of these rulings, the Commerce Department changed the way it calculates prices and duties, which will result lowering tariffs from 27 percent to 13 percent.
“Given that a NAFTA panel has preliminarily ruled that Canadian imports aren’t damaging American producers at all, home builders will continue to urge the administration to abolish the tariffs altogether,” Harmer said.
The California Building Industry Association is a statewide trade association representing more than 6,000 businesses – home builders, remodelers, subcontractors, architects, engineers, designers, and other industry professionals.
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