Trade Dispute - US and Canada have been in a softwood lumber dispute since the 1980s [1] - The US imports about 25% of its softwood lumber from Canada [2] - The Commerce Department is expected to increase tariffs on Canadian softwood lumber from 144% to 345% [3] Market Impact - US builders claim restrictions on Canadian imports increase home construction costs, even though lumber accounts for less than 20% of those costs [3] - Increased tariffs could negatively impact Canada's lumber industry and benefit US producers [4] - Replacing Canadian wood in the short term could increase housing costs [4] Potential Resolution - Canada may consider capping lumber exports to the US [4] - The US aims to increase domestic lumber production by streamlining permits and reducing bureaucracy [4]

Lumber Market Volatility - Lumber prices are volatile, causing uncertainty for construction businesses [1] - In April 2025, softwood lumber prices were 23% higher than the previous year [2] - Lumber futures surged in the first quarter of 2025 due to fears of higher duties and sawmill closures in North America [2] Impact on Homebuilders - Rising lumber prices have impacted major US homebuilders like LAR, Dr Horton, and Toll Brothers, leading to stock declines [2] Trade and Supply - Canada accounts for approximately 85% of all US softwood lumber imports, representing almost a quarter of US supply [3] - Lumber is on the radar of the Trump administration regarding tariffs [3]