Secretary of Commerce Wilbur Ross said Tuesday he doesn’t expect U.S. home prices to increase even after a 20 percent tax on imports of Canadian softwood lumber, commonly used in the construction of single-family homes.
Ross told reporters Tuesday that the move by the administration to retroactively apply the duties Canadian lumber might cause some small increase in lumber costs, but it won’t have a major effect on home prices.
“We do not think the price of lumber will go up anything like the 20 percent, but there may be some small increase in the price of lumber for the house,” he said.
Ross added that the cost of constructing a home isn’t based primarily on the actual materials used to build the house.
“Not necessarily, because you’re talking such a small amount, and the biggest part of most home prices in any event is the land value not the lumber value,” he said.
Ross said the dispute over softwood lumber and the type of milk used to make cheese — something President Trump tweeted about earlier on Tuesday — shows there are some issues with how the North American Free Trade Agreement is working.
“Think about it, if NAFTA were functioning properly you wouldn’t have these kind of prickly, these unfortunate developments, back to back,” he said. “It shows NAFTA has not worked in the way that it should.”
He said Canada is mostly a good neighbor and trading partner, but they need to play by the rules.
“It’s not a question of President Trump messing with the Canadians, we believe the Canadians violated legitimate practice,” he said. “To the extent we can correct that it should be corrected.”
The U.S.-Canada lumber dispute has raged for decades, and has resulted in two softwood lumber agreements in which the two countries agreed to put limits on U.S. imports of lumber from Canada. The second agreement expired in 2015, and the two countries failed in 2016 to reach a new deal, which prompted the U.S. industry to seek import protection once again with the U.S. government.
