FX.co ★ Lumber Falls From 2-1/2-Year High Ahead of Tariff Announcement

Lumber futures recently fell below $670 per thousand board feet as investors paused in anticipation of the U.S. announcing reciprocal tariffs. This dip follows a rally that saw prices reach a two-and-a-half-year high of $686 on March 25th. The increase in lumber prices has been fueled by seasonal demand and concerns surrounding trade disputes. The Trump administration is contemplating raising Canadian lumber duties from approximately 15% to nearly 40%, a significant factor as Canada accounts for about 25% of the U.S. lumber supply, despite shifts in some production to the U.S. Aside from tariffs, Canadian supply issues have been intensified by challenges such as wildfires, seasonal logging slowdowns, and sawmill closures. Furthermore, the U.S. Department of Commerce conducts periodic reviews of duties imposed on Canadian softwood lumber, with the sixth annual review—originally slated for February—being postponed by up to 90 days. It is widely anticipated that the current duty rate of 14.54% will be increased twofold.