Policy bankrupts large swaths of the logging industry. We create restrictions that substantially increase the cost of harvesting timber on public forest lands ( and add fuel load btw ). This has left major land owners as our primary source of timber ( read monopolistic ). Allow these timber companies to ship our timber overseas to create an intentional artificial shortage ( yes it is documented ).
I know, let's solve this problem by adding tariffs on timber from Canada who openly supports their timber industry.
Alternatively, you could fix the problems at home!
( Might be a little tainted as I grew up when the spotted owl shutdown the living for entire towns in Washington and our fathers had to go to Alaska and Canada for years to make money to send home. )
>Policy bankrupts large swaths of the logging industry.
Just speculating here but it's probably the big guys / Multi National lobbying the US Gov for tariffs knowing full well they can can manage since they have assets on both sides of the border and drive the Independents and little guys out of business causing more consolidation and getting rid of any potential competition. It's the same as the Rich advocating for higher taxes, trying to keep less people from getting rich. I know a few guys in the Oil/Blending business and they are under constant assault from the Majors who keep advocating for more and more regulations hoping to bankrupt the smaller players and consolidating their grip on the Industry. You can't take anything anymore at face value, there is always an angle.
> Allow these timber companies to ship our timber overseas to create an intentional artificial shortage ( yes it is documented ).
Am I understanding right that this would mean US would be incentivized to not export lumber (since domestic demand would grow in response to the increase in canadian lumber prices), and conversely, Canada would just fill the export gap left open by the US, leaving Canada in a stronger, more diversified trade position and the US in a worse, nationalist position? Or am I missing something?
I am having a difficult time wading through current "shortage" links to find the original information. However, here is the gist.
- The inventory of raw timber ( the type you see in log yards ) has grown too large.
- Lumber mills are lowering the amount they will pay for raw timber as a result. As well as the rest of the end lumber market.
- This causes timber companies profit per foot to drop.
- The timber companies decide to "export" raw timber overseas at a loss.
- This in turn raises the rate the Lumber mills and Lumber consumers pay out pacing the original loss on "exported" timber.
It is important to also note, most of this timber came from public lands to begin with.
The overall point is OUR resources were exported at a loss so OUR prices would increase. Forests are part of the wealth of our country. Letting a timber company send it overseas to increase domestic timber prices should be illegal.
> The overall point is OUR resources were exported at a loss so OUR prices would increase. Forests are part of the wealth of our country. Letting a timber company send it overseas to increase domestic timber prices should be illegal.
The same argument applies to cars, and to everything else we make or harvest. Should we ban all exports? (Please, no, it is a bad idea.)
I didn't make any argument against exports. Obviously international trade is generally good.
The arguments is exporting our own resources in order to drive up the price of those resource domestically. Remember, they didn't make a profit exporting the timber, they exported it at a loss. With the sole purpose of driving up domestic prices.
>Remember, they didn't make a profit exporting the timber, they exported it at a loss. With the sole purpose of driving up domestic prices.
What's the evidence that is their intent (ie. they're selling at a lost as part of some sort of diabolical scheme to increase prices), or they're just strapped for cash and selling to whoever is willing to buy them?
So you're suggesting what, exactly? It looks like you're making an emotional point based on some kind of national stake in resources. But it's not "our" timber -- it's the timber of some people who worked and invested in the capacity to cut it. If domestic timber prices are lower than foreign timber prices, making it harder for them to export timber just hurts the industry more. They're not sending it overseas to increase domestic timber prices; the domestic market has a glut, so foreign markets are willing to pay more -- that's how markets work, and interference in that process being bad for both domestic and foreign market participants is one of the few things most economists of all stripes are usually in consensus about.
Not that I'm doubting you, I'm just trying to understand this claim. Can you explain the motivation behind exporting at a loss? If the argument is that there's too much timber supply driving down prices to the point that some of the inventory is sold at a loss, wouldn't it make more sense to just cut less trees?
Exporting at a loss is often the prudent financial measure just because of market conditions, and it does have the effect of increasing domestic prices (as a third-order effect), but the way you're describing it happening isn't plausible.
Do you have a citation that they're intentionally losing money in order to drive prices up to a target price? Because that, no offense, would be idiotic unless they have some kind of subsidization deal that would support it, as the export of any quantity of lumber even at break-even would not increase domestic prices enough to justify the losses of profit on that lumber if profit was available.
It sounds like the market is down, and they have lumber on hand, and it's better to sell at a loss and realize the revenue in most cases than to not sell at all.
Upvoted because it's a good summary, but could you offer a source for your claim that "most of this timber came from public lands"? This is surprising to me, and I'm wondering if this is a local phenomenon rather than a national claim. The very quick searching I did (https://www.everycrsreport.com/reports/R45688.html) suggests that the harvest from NFS lands peaked at about 15% in the 1980's, and has been lower since.
Incredible. Instead of putting tariffs on Chinese cheap stuff that most people can get by without, US is putting tariff on one of the main exports of its closest allies.
Well yeah, the US has been doing that forever. There is an economic incentive to fuck over Canada, and none to stop enjoying cheap labour and efficient supply chains from China. The US pretty much only does things when it is in it's interest, and if that happens to be a good thing it will be spun as a principled decision but that's generally a coincidence.
It's worth noting the WTO has repeatedly ruled in favour of Canada that this cost structure does not amount to subsidization. This is just pure pandering to the U.S. lumber industry. Guess what? Canada has a lot of forested land. It's one of our plentiful natural resources. Most countries allow exploitation of their natural resources.
The U.S. argument amounts to nothing more than "we don't like that they have a lot of trees and that that makes our trees less valuable".
Canada is a net exporter to the U.S. of raw materials and a net importer from the U.S. of finished goods. The only reason they attack lumber is because unlike every other raw material, lumber doesn't make its way into many things that the U.S. exports.
*Four of the top ten largest firms are based in B.C. (West Fraser, Canfor, Interfor and Tolko), with the first three holding substantial sawmilling assets in the U.S.*
So it seems these Corps own assets on both sides of the border and it isn't clear how these tariffs help them. From what I understand (possibly wrong,) there has even been more consolidation in the Lumber Industry in the last couple of years and like 5 Companies own all the Sawmills on both sides of the border.
> So it seems these Corps own assets on both sides of the border and it isn't clear how these tariffs help them
Maybe that's looking at it the wrong way; tariffs and trade battles are going to happen anyway, if I have operations on both sides of a border in a way I'm hedged against their impact.
(I am not a US citizen, but visited many times)
Why not build houses using concrete/cement? Poor Asian countries have been building houses for decades using concrete and less maintenance. No, it is not about weather. Concrete can be easily used in Southern US states where winter is less than a month or no snow at all. At least the structure can be concrete and the walls be wood or drywall. I think it is the wood mafia trying to make a living out of enforcing city codes to use only lumber for houses.
The type of lumber used to frame American houses is (well, used to be) quite cheap. Concrete is like $10 per cubic foot. While, a timber framed wall is mostly air. An 18x8 foot wall made of timber would take about 16 boards to make and take an experienced team less than 20 minutes to put up. That's $100 or so in material costs at current (extremely high) prices, plus maybe $100 in labor (this is pretty hard to estimate, actually).
That same wall would be like $700 if made from concrete. And labor costs would be probably equally as expensive because those forms take a long time to assemble. They need to be shipped in, assembled, left to cure, disassembled, then hauled away. While lumber just needs to be dropped off the back of a truck into a pile in the yard.
Poured concrete will often use a lot of lumber anyway, since the concrete needs forms to be poured into. However, using precast concrete or CMUs avoids this.
Another type of concrete construction in parts of Asia uses prefabricated, reinforced concrete members. Piers, beams, and panels with internal steel made in a controlled factory setting and having high strength. It's a bit like half-timber construction but replacing the thick timber with concrete. They also use similar concrete for telephone or neighborhood power poles.
They are brought on site and erected by cranes and pile drivers to build the frame of a house somewhat like with large timber. The panels are set across beams to fill in floor areas, and walls are closed with non-load bearing elements, whether brick, blocks, stucco, drywall, etc. I am not sure how well this method works for seismically active areas though, where you would need to tie those in-fill wall areas into the structure.
Also, a lot of home construction in the US is single family and this type of construction is by and large mostly wood.
Concrete is used as a base for apartment (like four or five over two) but wood still makes up the majority, and there aren’t a whole lot of residential projects in the country built as massive concrete tower blocks outside of some specific regions.
Partially because until recently, wood was the most plentiful and cost-effective building material in parts of the US. It is far more seismically resilient than brick or concrete.
It is also much easier to modify if you want to add a window or other opening - cutting an opening in a concrete or cinder block wall is much harder.
Wood, when responsibly harvested, also sequesters C02.
That all said, it's possible we'll see an uptick in the popularity of alternative structural materials to wood - but traditional concrete has an absolutely massive carbon footprint, and low-carbon and low cost concrete alternatives aren't readily available on the market at this time.
We don’t need to do much of anything, but tall buildings are fine, given that they minimize the land impact of a given amount of square footage, and denser communities have lower land footprint and lower per capita carbon emissions.
(European cities are plenty dense at moderate heights, but they also offer much smaller living quarters than American ones; a Parisian studio is in the range of 9-35 m^2 whereas an average Manhattan studio is 51 m^2, and most Americans would consider it small.)
Skyscrapers specifically (tall buildings depends on definition of height), but they’re very energy intensive. You can only operate, construct, and maintain them with cheap oil.
The problem isn’t density (most European towns are perfect here actually) but too much density. Manhattan is the opposite spectrum of suburbia, and neither are very desirable. France actually does this well in Paris, as you mentioned. The American thing to do would be tear down every arrondissement and replace with skyscrapers. Paris sort of made that mistake with part of the city before they stopped.
I have to imagine that it's not that skyscrapers are great for emissions, but that the suburbs are just abysmal and so everything looks good in comparison.
Walkable neighborhoods and bike-friendly development in mixed-use medium density areas is probably the best. The main issue with suburbs is that you have to drive everywhere, not necessarily the density.
It varies between regions, but in general, building with wood is significantly faster and less expensive than using concrete. They are also easier to remodel, extend, and ultimately demolish, but these are secondary reasons.
Some areas, such as regions of Florida or Arizona for example, have substantial historical housing stock made from concrete. However, the majority of new construction is wood for the reasons stated above.
There are not (to my knowledge) any building codes that prohibit concrete construction for residential.
At least in FL, slab-on-grade with concrete block for the first story + wood frame for additional stories is incredibly common because it is far less susceptible to termite & moisture rot damage than slab + wood frame or wooden pier + beam.
Environmental concerns are one reason. Concrete is more environmentally intensive than lumber, and the construction industry already accounts for a significant portion (about 10%) of global GHG emissions. We should be moving away from using concrete when more sustainable alternatives exist.
The US has vast timber forests, so it is inexpensive, and timber (or steel) framing works well for earthquake resistant construction. A large part of the US is a seismic hazard zone and the building regulations reflect that. You can find older neighborhoods with unreinforced masonry throughout the US but those date from a time before they had modern building regulations and before the extent of earthquake risks were fully understood.
According to this article [0], cement is the source of 8% of the worlds carbon dioxide emissions. Switching from renewable materials like wood to carbon emitters like concrete is not what the world needs right now.
> I think it is the wood mafia trying to make a living out of enforcing city codes to use only lumber for houses.
Not really. No more than the ice mafia made the inuit build igloos out of ice. People do with what they have. The eastern seaboard is chock full of trees. When the settlers arrived, they used what was readily available. It's far easier for settlers to make homes out of wood than stone/rocks/etc and concrete didn't exist back in the 1600s/1700s. And as the borders of the country expanded westward, the style of homes made its way west as well.
My ex-wife is Chinese from a city in China where everything is made out of cement.
The reason? The region also lacks trees. They have an abundance of the raw materials for cement, but not wood.. So that is what they used.
Cement is also a terrible material for many climates. Here (ontario) the freeze/thaw cycle causes it to crack unless you use a lot of costly methods to prevent this.
This is a weird decision given that the eviction moratorium has been overturned by the courts and millions are going to be facing housing difficulties over the rest of the year as those evictions start to happen. Both the sales and rental markets are very low on supply right now. Increasing housing costs through higher building expenses seems like it will end up being a political land mine.
Very surprised to see some arguments in the article saying lumber only make 4% of construction prices. I'd love to know what type of construction they're looking at.
We're currently in the process of building a house and current lumber prices (because of covid mainly) are definitely impacting costs, to the point that it's one of the first thing that both our architect, and then builders mentioned.
Everybody involved in the trade have mentioned the idea of waiting an extra year before building, mostly because of lumber prices.
in a traditional 2x4 construction stick built home, the amount of cost wood has is very low, iiiiifffff you exclude premium wood products like hardwood flooring, cabinets, trim, etc. I believe the 4% estimate is fairly accurate for traditional rough in.
Currently those tariffs have a big impact on the markets in Germany, Austria and others in Europe too.
According to the media the US is buying wood at large [e.g. 1] in combo with local companies trying to stock up prices for wooden build home increased 20-30% in the region. If you talk to local carpenters (Austria) lead times are a roulette game and prices change daily.
The post-covid effect may complicate things furthermore.
If this actually works to shore up the domestic end-to-end supply chain for lumber and lumber products so that we don't have to rely on growing and harvesting trees here, sending them across the world for processing, just to ship them back as plywood and other wood products then great!
Based on what products this is targeting and the current domestic labor situation here it appears that this will absolutely not be the case.
For reference, the base price/square foot of new construction increased 20% when Trump introduced these tariffs.
He also tariffed Chinese concrete at the same time.
The reason it went up so much is (like any other business), contractors and manufacturers need to preserve their profit margins, multiplying the impact of the tariffs for new home builders.
It also allowed domestic producers to hike their prices (which they did). Also, the tariffs caused many substitutions of slightly more expensive (but now cheaper) materials, leading to bizarre shortages and more price hikes.
Then, covid hit and now this. It’s a complete disaster.
Is the department of commerce actively trying to get Trump back in in 2024, or do they just like inflation, homelessness and high interest rates?
Yeah, it really is weird, there is nothing wrong with demand increasing and everyone starting to build housing, however there is something very wrong about making it harder to build houses than absolutely necessary.
Those tariffs made sense in 2018 but they don't make sense in 2021. Everyone considers USA an export destination where every country dumps their products, that means some degree of unemployment is unavoidable because these countries run trade surpluses on purpose and they won't stop them. Right now unemployment is on a heavy downward trend, which means there is no need for protectionism anymore.
Maybe China will step up and take in the extra lumber. Canada increasingly relies on exports to China anyway. Canadians are holding joint military exercises with them. And Chinese investors are buying up prime property in Canada. Nothing wrong with it. Just the way the cookie crumbles.
Pierre Trudeau was the one who opened trade with China. He was also a close personal friend of Fidel Castro. Interesting how the son is following in the footsteps toward authoritarianism.
I can't say that I understand that move since the price of lumber is at ATH but as a Canadian if it reduces the price for wood (and housing) I am all for it.
This was all over the news. That said nobody in Canada was expecting Biden to be less protectionist, it was clear he was cut from the same cloth as Trump as far as his thoughts on globalization and allies went.
I dont think the historical arguments about Globalization hold up in a post-covid world. We are seeing a massive CPU and GPU shortage. TSMC is a nexus of world trade. We saw a massive Suez canal blockage.
The merits of locally produced goods are far more apparent now than ever before. We are in a new age.
Given the estimated gains of globalization just in economic terms (to say nothing of worldwide economic stability in most situations), which are in the 14-figure range, there's significant doubt here. Yes, there's likely room for things to be made in more than one place in many instances. But global comparative advantage is still the single greatest contributor to rises in global standards of living. Billions of people have been raised from extreme poverty due to globalization in the last few decades.
Those shortages we occasionally get are market opportunities that will encourage new market entrants. We don't need to attack globalism to get redundant production.
One problem with globalization is that it takes forever to pull everyone up to the global middle class (around $10k per capita). That's not just bad for low skilled workers in the US. A lot of countries get stuck in the middle income trap because foreign investors move on to the next cheapest country.
Am I completely out of the loop or is this sarcasm? I thought the lumber costs were skyrocketing and housing prices were too. At least in the US, I thought this was the case.
In many places cabinet grade hardwood plywood is cheaper! I could sheath my roof and house with 3/4" cabinet grade maple for the same price as "cheap" ugly OSB.
Which in practice just means that the land didn't get a chance to appreciate by 20-30k.
Houses cost every spare penny that we can save up to pay for them. Whether the pennies end up going into raw materials, or speculators doesn't really matter to the end purchaser.
If labour and materials became free tomorrow, the cost of housing would remain unchanged, but the cost of land would rise to pick up the slack.
Thank you for a very insightful comment. Houses are worth what people will pay for them, and when you can borrow money so cheaply they are worth a lot! What else are you going to buy? Having a nice place where you spend a lot of time that is near things you do be it work or recreation is worth as much as you can afford to pay - a house in a good location saves precious minutes of your life!
As a Canadian - awesome! (Given that I understand the consequences correctly, that is.)
The incredible demand, coupled with supply chain troubles, has driven up the price of lumber here nearly 300% A 8' 2x4 was $2.95 this time last year, today it's $10.
I hope this cools the exports of lumber from Canada, and we see the prices move back towards a sane level.
As a Canadian, I disagree. The US has unfortunately been shafting Canada on softwood lumber for decades[1].
Your implying that Canadian logging companies are just going to sell cheaper lumber to Canadians. I would say that that's just one piece of the picture.
Canada's economy is based upon selling resources to the United States (mostly oil). The United States historically has abused their monopoly on buying Canadian resources. Since the US is a much larger and stronger country, the US essentially sets the rules.
If American companies stop buying Canadian lumber, it will be a net negative for Canada. We have a massive deficit due to our massive covid stimulus spending. We need American money more than they need Canadian lumber.
I know, let's solve this problem by adding tariffs on timber from Canada who openly supports their timber industry.
Alternatively, you could fix the problems at home!
( Might be a little tainted as I grew up when the spotted owl shutdown the living for entire towns in Washington and our fathers had to go to Alaska and Canada for years to make money to send home. )