The Trump administration’s latest tariff onslaught won’t just hurt Canadian forestry workers during already tough times, but will also undermine U.S. efforts to make housing more affordable, says the head of the Forest Products Association of Canada.

“Overall for us, 98 tariff line items were added for forestry, which is a direct assault on our sector and on our workers here in Canada,” Derek Nighbor, president and CEO of the association, said in an interview Wednesday.

The U.S. government announced a plan late Monday to impose a 50 per cent tariff on hundreds of categories of Canadian goods, including several varieties of plywood, paper and other wood-derived products. The tariffs are slated to take effect on Aug. 19 and would be imposed using an obscure legal tool dating back to the Great Depression, Section 338 of the Tariff Act of 1930.

Many of the products targeted in Monday’s tariff announcement are closely linked to the U.S. homebuilding sector, Nighbor said. Canada is the third-biggest exporter of plywood to the United States, a $500-million business, and is the top supplier of fibreboard, accounting for another $400 million.

“People are either going to stop buying altogether because it’s too expensive or only those who are wealthy enough to buy will buy it,” Nighbor said of those goods.

“It just means lower housing activity in the U.S. and higher costs for Americans.”

The Canadian industry had already been dealing with long-standing duties on softwood lumber when, last year, an additional 10 per cent tariff was imposed on certain softwood lumber products using a different legal mechanism than the latest barrage. In that case, the U.S. invoked a law that allows tariffs to be imposed in the name of national security, Section 232 of the Trade Expansion Act of 1962.

On average, softwood lumber shipments going on to the U.S. now face a collective 45 per cent duty. The Canadian market share has dropped as a result, but Nighbor said the U.S. has few other options to fill the gap. U.S. homebuilders prefer wood from northern climates, which tends to be more durable and pliable, so they have been sourcing supply from Europe rather than domestically.

CIBC analysts wrote in a report that they understand lumber will not be subject to the new 50 per cent tariffs, but that a range of plywood, fibreboard, particleboard and veneered panel products will likely take a hit.

The rationale U.S. officials provided for the latest tariffs are provincial bans on U.S. alcohol, Canada’s supply managed dairy system and quotas on American cars, themselves retaliation for U.S. tariffs.
  
Source: ctvnews.ca