SPOKANE, Wash. – Concerns are rising in Spokane over potential tariffs that President-elect Donald Trump has proposed on Canada and Mexico.
Trump announced he would impose a 25% tariff if the countries do not stop what he describes as the flow of drugs and migrants across the borders.
Canadian Prime Minister Justin Trudeau met with Trump last Friday night, but it remains unclear if any progress was made during their discussions.
Local experts are worried about the economic impact if these tariffs are imposed.
“Timber prices are likely going to go up,” associate professor of economics at Gonzaga University Ryan Herzog said. Joel White, the executive director of Spokane Home Builders Association added, “There’s a chance you could see an increase in the cost of housing just overnight.”
The uncertainty extends to whether this 25% tariff would be in addition to the 14% tariff imposed by President Joe Biden earlier this year.
White noted, “The speculation of the market, already seeing lumber prices increase by about 18%.”
This situation follows the economic challenges of the pandemic, when a thousand board feet costed $1,700 to $1,800.
“I don’t think we’re going to get close to the pandemic level,” White stated.
Currently, the price has dropped to below $400.
According to the U.S. International Trade Commission, the U.S. imported over $20 billion worth of timber from Canada, while exporting only $10 billion to Canada.
The long-standing argument that Canada unfairly subsidizes its lumber industry adds to the tension.
“We just don’t harvest lumber like we used to in the old days. There’s some history with some environmental challenges with logging,” White said.
The potential tariffs could have broader economic implications. Herzog explained, “Mortgage rates are going to be higher, car loan rates are going to be higher, borrowing rates across the board are going to be higher if there is this perception that these tariffs are going to be inflationary, which I’m not sure how they wouldn’t be inflationary..”
As of now, it remains uncertain if President-elect Trump will impose these tariffs, how long they would last, and the duration of any resulting increase in lumber prices.
