“Even Modest Cap on Canadian Lumber Threatens 8,900 U.S. Jobs”
“15% Tariff on Canadian Lumber Would Cost 4,666 U.S. Jobs”
Tariff on Canadian Lumber Would Cost US Jobs
National Association of Home Builders LINK
Recent NAHB estimates show that a 15 per cent tariff on softwood lumber imported from Canada would have resulted in a loss of:
- US$265.4 million in wages and salaries to US workers;
- US$188.7 million in taxes and other revenue for governments in the US; and,
- 4,666 full-time US jobs.
had it been applied to all Canadian producers in 2014.
NAHB analyzed 15 per cent, because that was the maxmum tariff in the Softwood Lumber Agreement that expired last year.
NAHB analyzed 2014, because that was a recent year with complete data, seemed representative in the sense that available data for adjacent years were similar, and was a year in which a tariff was not generally in effect, allowing us to illustrate the differences in a market with and without the tariff.
The 2014 data show that the US produced 32 billion board feet of softwood lumber, exported 1.6 billion board feet of it, imported 12.1 billion board feet from Canada, and 0.4 billion from other countries during the year.
NAHB then used average estimates of market responsiveness to price taken from a 2011 technical article by Baek.
Even allowing for some increased output by U.S. lumber producers, NAHB’s National Impact of Home Building Model shows that the impact of the reduced investment in housing is substantial.
Cap on Canadian Lumber Threatens US Jobs
National Association of Home Builders LINK
Recent NAHB estimates show that a 25 per cent volume cap on softwood lumber imported from Canada, had it been in place in 2014, would have resulted in a loss of:
- US$510.6 million in wages and salaries to US workers;
- US$364.9 million in taxes and other revenue for governments in the US; and,
- •8,941 full-time US jobs.
This post takes a more forward-looking approach and considers a volume cap of the type industry stakeholders currently fear the U.S. will impose.
The most recent available data show that Canadian imports accounted for about 28 per cent of softwood lumber sold to US customers in 2014 (and most of the data for other recent years does not appear drastically different); so 25 per cent is probably the most modest volume cap the US would consider. Even so, the resultng loss of 8,941 US jobs under this “modest” cap is considerably greater than the 4,666 jobs lost under a 15 per cent tariff.