General Category > Economy/Business
Trump’s New Housing Tax: A tariff on Canadian lumber will raise the cost of U.S. homes.
SirLinksALot:
SOURCE: WALL STREET JOURNAL
URL: https://www.wsj.com/articles/trumps-new-housing-tax-1493159499
Commerce Secretary Wilbur Ross announced Monday that the Trump Administration will raise the cost of new single family homes in the U.S. as part of its promise to “make America great again.”
Mr. Ross didn’t put it quite that way. He said the Administration will impose a 20% tariff on softwood lumber imports from Canada, a country they accuse of subsidizing their lumber industry, which total about $5 billion at year. But that’s a lot of lumber and the tariff will add an additional $1 billion in new costs for U.S. construction. Most of those costs will be added to the price of new American housing, not counting the higher costs that will come as U.S. producers raise their prices to match the competition and pad their bottom lines.
... [SNIP]
Yet while the cross-border haggling drags on, middle America is where the new lumber tariff will hit hardest. According to the National Association of Home Builders, 28% of U.S. softwood lumber purchases are Canadian imports and these are particularly important in the construction of single-family homes. Roughly 7% of the cost of an American home is the lumber and that cost is already up, on average, by some $3,000 this year. The Journal reports that “builders say lumber costs are already at the highest in a decade.” Labor shortages in construction, thanks in part to restrictions on immigration, are also pushing up costs.
With his announcement last week on steel and this week’s lumber action, Mr. Trump’s trade policy is coming into focus. He’ll use tariffs to restrict imports and appease domestic producers that have the best trade lawyers and lobbyists, while hoping consumers don’t notice the higher prices. Mr. Trump made it to the White House with the support of middle-class voters still yearning for the American dream.
(Excerpt) Read more at the above link
mirraflake:
WSJ is pro globalisation so I would like to read a competing view before making up my mind.
Sanguine:
Yes, that's what tariffs do.
mirraflake:
--- Quote from: Sanguine on April 26, 2017, 02:20:45 pm ---Yes, that's what tariffs do.
--- End quote ---
If Canada is wiping out our own wood industry by subsidizing theirs something needs to be done. I believe GWB did the tariff against Canada back in 2003 for 30%.
@Sanguine
Sanguine:
--- Quote from: mirraflake on April 26, 2017, 02:28:54 pm ---If Canada is wiping out our own wood industry by subsidizing theirs something needs to be done. I believe GWB did the tariff against Canada back in 2003 for 30%.
@Sanguine
--- End quote ---
I'm not saying the net effect will be good or bad; I don't know. Just commenting on what tariffs do.
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