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US just slapped a 20% tariff on Canadian softwood

Started by trecher2, April 25, 2017, 09:24:23 AM

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trecher2

In 2016 canada exported 5.7 billion in softwood. That will have an impact kinda like a flood, the 20% will even the field so to say. I feel for the canadian logger that actually gets his hands dirty but not the "system" for which he works.. heck looks like i can dust off the old processor and maybe take a break from the old 066. Sure would be nice to be able to move some local pulpwood, to the local mill, to support our local economy and thus put us locals back to work. Thats assuming he's able to fire the mill backup. In all this, hell who knows maybe even help make a payment or two on my equipment and hire more help. Heck who knows maybe even afford to build something with all the darn stuff I produce, I guess i'm just dreaming now.. but making some payments, I hope thats not too much to ask.

sawguy21

I think you mean exported. That sounds like the total for all markets, not just the USA. I wouldn't get too excited about the tariff, this is just the opening shot in a long war. We go through it every time the softwood lumber agreement comes up for renewal but if your government is bent on making wood products unaffordable for the average American consumer so be it, US producers can't meet the demand.
old age and treachery will always overcome youth and enthusiasm

snowstorm

This fight has been going for years. Not all got to pay 20% Irving got hit with 3%.I don't see how this is going to help the pulp wood market. The terrif has been in place for years

sandsawmill14

somebody is producing enough ???  i have quit even taking free pine logs and i dont know of anyone buying pine logs or even pine chips now :( they stopped the chips a couple months ago  the last pine we sawed came off of a clearcut so we had no choice finally sold the 4x6s for 200 a 1000 and sold about 1/2 the lumber for 100-150 a 1000 and gave away some and still ended up burning about 10-12 mbdft  ::) next time i will just burn the logs its harder but cheaper than swing it  ::) i hope this helps but i am not very hopeful  :-\ i think sawguy is partly right they will just jack the prices on the retail end and blame the tariff  >:(  but we could meet the demand if it would change before the rest of the mills go bankrupt :-\   i can saw 500 + mbdft with my bandmill a year and have a bigger mill that saw 1/2 gain that much at least and i know thats just a drop it the bucket but the scragg i saw for can cut 20mbft per day on average and if we hook the gang back up as we would to saw framing lumber it would double that in 2x4 and triple in the bigger stuff it will saw up to 2x12 i think but i am certain it will saw 2x10 and thats only one mill and there are 6 comparable size mills in a 30 mile radius of me :)  my brother sawed his house plan out in about 3 hrs  :o just for an example filling the orders aint a problem it getting the orders is where our hold up is :)
hudson 228, lucky knuckleboom,stihl 038 064 441 magnum

78NHTFY

Don't know much about the issue beyond the rhetoric.  So, just looked up census bureau trade #'s for lumber/logs that were imported/exported.
Exports to Canada: 2014 = $ 1.23 bn; 2015 = $ 1.17 bn; 2016 = $ 1.11 bn.  Expect this is mostly logs.
Imports from Canada: 2014 = $ 5.1 bn; 2015 = $ 4.7 bn; 2016 = $ 5.8 bn.  Expect this is mostly lumber.
Will a 20% tariff reduce imports?  The tariff would mean a $ 1.16 bn increase in cost to the US importers (and more to their consumers, as profit margins are tacked on) if the tariff had no impact.  Imports will surely will not disappear, but even if they drop by 20%, that's a billion plus in lumber product that need to be sourced in the USA.  It will be interesting to see developments in the coming months/years and I bet the Forestry Forum will have "its finger on the pulse". :D  All the best, Rob.
If you have time, you win....

BradMarks

I think it's actually a 3% increase to the tariffs that have been in place for decades.  The old "temporary" higher rate expired in 2015 I believe, and this brings it back up to that level is my understanding.

Mountaynman

round here in Central NY we have some awesome high quality spruce,pine,larch and hemlock for years the Quebec govnt subsidized the trucking bring 2x4's down here and bring logs back from the jobbers down here go to lowes and home depot with product and bring raw material back always made me wonder why no one could mill the lumber here and do away with all the trucking but have since learned the answer

Labor costs workers comp retirement health insurance and taxes make it impossible to do it here unless someone with big pockets puts in an automated METSO mill and saw huge numbers with 10 people in the yard
Semi Retired too old and fat to wade thru waist deep snow hand choppin anymore

bushmechanic

I can't speak for the rest of Canada but here in Newfoundland we get nothing in subsidities. In fact it costs way more to operate as everything comes here on a ferry or is flown in. We have to pay workers comp, labour costs and all that you guy's have to as well. Not too long ago we had three paper mills here and now we are down to one, sawmills are down in numbers also, it's just a bad time in the forestry sector for everyone. I wish the dollar was on par with the US because when we need parts a $75.00 unit will cost us $100.00 plus freight. I felt I had to comment because the "system" isn't the same for everyone here, just a little FYI! I think it is like the old saying you have to walk a mile in some ones shoes.   

krusty

Not wanting to get into the emotional side of the discussion.....this battle has been going on for well over 100 years! For the most part the "World" has sided with Canada on this one.

In Western CAN they cut on crown land and pay a fee on a cost recovery basis. In Eastern CAN they cut on private land and stumpage is more (market value).

In the US, it is on private land and stumpage is more (market value) hence the US thinks Western CAN is 'subsidized' since it is simply cost recovery on crown land.

My only comment generally is that I dont really think of something operating on a cost recovery basis as being subsidized as compared to our general socialist practices.

On a forestry note though I took my TJ206 for a quick ride in the swamp now that the frost is well out of the ground. Maybe got 30 feet before it sank up to the axles. Attached the winch to a nice solid ash tree and pulled myself back.....you gotta touch the flame once!

4x4American

Quote from: Mountaynman on April 25, 2017, 05:58:49 PM
round here in Central NY we have some awesome high quality spruce,pine,larch and hemlock for years the Quebec govnt subsidized the trucking bring 2x4's down here and bring logs back from the jobbers down here go to lowes and home depot with product and bring raw material back always made me wonder why no one could mill the lumber here and do away with all the trucking but have since learned the answer

Labor costs workers comp retirement health insurance and taxes make it impossible to do it here unless someone with big pockets puts in an automated METSO mill and saw huge numbers with 10 people in the yard


Many times, when I'm looking for a load of pine logs, I get told that I have to pay what the Canadians are paying picked up at the header, and then when I go to sell the lumber, the retail customers want me to sell it for what the Amish sell it for, which is dirt cheap.  ???
Boy, back in my day..

Bandmill Bandit

Quote from: 4x4American on April 25, 2017, 09:21:32 PM
Quote from: Mountaynman on April 25, 2017, 05:58:49 PM
round here in Central NY we have some awesome high quality spruce,pine,larch and hemlock for years the Quebec govnt subsidized the trucking bring 2x4's down here and bring logs back from the jobbers down here go to lowes and home depot with product and bring raw material back always made me wonder why no one could mill the lumber here and do away with all the trucking but have since learned the answer

Labor costs workers comp retirement health insurance and taxes make it impossible to do it here unless someone with big pockets puts in an automated METSO mill and saw huge numbers with 10 people in the yard


Many times, when I'm looking for a load of pine logs, I get told that I have to pay what the Canadians are paying picked up at the header, and then when I go to sell the lumber, the retail customers want me to sell it for what the Amish sell it for, which is dirt cheap.  ???

Trump is bent on destroying industry on both side of the border.

Canadas best lumber goes to Japan AND the USA. We get left with a very poor #2 that should be a 3 or utility as a result.

The big mills are so automated that there really isn't a labor factor. The local mills that had a work force of 200+ each, 15 years ago have a work force less than 30 each today including security people and produces  2+ times the volume AND the lumber is produced using high pressure water saws.

The so called subsides are a stupid system where the loggers pay stumpage that ends up going to all sorts of things that i dont think any one can even track.

I am pretty sure the Quebec industry figured out how to haul down on Gov$$ and get a back haul of usa timber that the gov could not collect stumpage on BUT the canadain mills would process and haul finished lumber back to the usa on Gov $$ where it came from in the first place.
We call it logging/farming the government.   
Skilled Master Sawyer. "Skilled labour don't come cheap. Cheap labour dont come skilled!
2018 F150 FX4, Husqvarna 340, 2 Logright 36 inch cant hooks and a bunch of stuff I built myself

Oliver05262

  Here in the US, the National Association of Home Builders has a gloomy forecast as to the impact of the duty; they feel it's not good for anyone. Hurts jobs and revenue in both Canada and the US, and raises the cost of building homes and the resulting price to the buyer.
  There's more than one side to every dispute. Sometimes we all get hurt.
http://eyeonhousing.org/2017/04/impact-of-the-duty-on-canadian-lumber-announced-april-25/
Oliver Durand
"You can't do wrong by doing good"
It's OK to cry.
I never did say goodby to my invisible friend.
"I woke up still not dead again today" Willy
Don't use force-get a bigger hammer.

barbender

I know we felt it locally when the tariff came off in 2015. We had a flood of Canadian lumber come in. Decent 2nd entry Red pine gets $50-75 a cord stumpage here, whether private or government owned it's a market dictated price.
Too many irons in the fire

square1

Won't be buying much more lumber for the project I'm wrapping up. My projects are "wants", not "needs" so a 20% increase in cost to the majority of the materials on some will likely result in reshuffling of the project list.

red

I read it as a possible 3% to 20 % . The art of the Deal.
Honor the Fallen Thank the Living

Logger RK

I'm sure glad Donald Trump got elected. Maybe a Business Man can do what needs to be done.

sandsawmill14

Quote from: logger RK on April 26, 2017, 06:36:58 AM
I'm sure glad Donald Trump got elected. Maybe a Business Man can do what needs to be done.
just easing the epa restrictions should help if he can make them back off the loggers at aleast ;)
hudson 228, lucky knuckleboom,stihl 038 064 441 magnum

snowstorm

moose river lumber in jackman me says they will now expand. add more drying capacity and a 2th shift. they saw about 85mm a yr. and are part of pleasant river lumber

snowstorm

Quote from: barbender on April 25, 2017, 11:50:41 PM
I know we felt it locally when the tariff came off in 2015. We had a flood of Canadian lumber come in. Decent 2nd entry Red pine gets $50-75 a cord stumpage here, whether private or government owned it's a market dictated price.
$75 a cd stumpage?? whats the mill price? red pine dosent pay much here if you can sell it

nativewolf

This will be much to do about nothing.  The tariff wars preceded Regan and the US has lost every international court decision; Canada will sue and they'll win. 

The big issue here is that overhead of the US logging and small sawmills is borne by small operators.  It has nothing to do with EPA, (just see how tough rules on logging can be in Quebec and other places) etc etc.  In Canada the logger, truck driver, mill employee has free medical, good disability,etc even though they pay high tax that is a huge income boost.  Can you imagine how much healthier & wealthier you'd be if you had free medical, free PT, etc?  For most, if not all, loggers and sawmill employees it would be a big boost.  When it comes to actually growing trees Canada can't compete with SE grown plantation pine.  Period.  But the mills that process that plantation pine have, like others have mentioned, gone from 200 folks to 30 and they will likely get that down some more too.  They want standard size products (why they don't take big stuff) that they can merchandize effectively in a controlled system.  They did this to compete in a very tough market.  What does that mean for the rest of the US?  When you can truck logs from the US to Canada and mill them and return the lumber than something is whacky.  And that thing is safety net.  Put another way, this is in essence saying our safety net is so bad that it impacts 20% of the product price.  So what happens?

If you run logging operations along the Canadian border this distortion could even hurt you because the Canadians paid good money for logs, they will pay less now.  If you are a sawmill along the Canadian border this might help as you may, or may not, be more competitive locally.  More likely if you could not compete against Canadian mills than you'll not be able to compete against SE plantation grown timber and that mill infrastructure.  Perhaps it will encourage a couple of mills to upgrade, maybe an occasional boost in a town or two.  All in all much to do about nothing and unless we cut healthcare cost from 20% of GDP to 8% than none of this really matters.  Canadians have a very expensive social safety net but it makes them very effective in this industry and trying to impose tariffs to overcome that inefficiency is never going to work. 

And as to the people talking about Trump...you realize he has lost 2x as much money as he is worth...it was just other peoples money.  Not that this tariff has anything to do with Trump, this is an old old game that he US has lost for some time. 
Liking Walnut

snowstorm

And in other news Canadian Lumber mills buy Lumber mills in the southern us. I read that a while back

GAB

I was told this morning that the reason for the tariff on lumber was because the Canadians put a tariff on milk products going to Canada from the US.
Is there any truth to what I was told this AM?
Gerald
W-M LT40HDD34, SLR, JD 420, JD 950w/loader and Woods backhoe, V3507 Fransguard winch, Cordwood Saw, 18' flat bed trailer, and other toys.

barbender

Snowstorm, I just looked througb some timber auction results, and red pine ranged from $20 to $83.20 per cord stumpage. Red pine is one our biggest value species here, mostly due to the Potlatch stud mill in Bemidji. I don't know what the delivered prices are. I know we definately felt it when that tariff came off, all our industry is looking for is for it to be put back in place like it was. Not wanting to punish the Canadians or anything like that ;)
Too many irons in the fire

nativewolf

Quote from: GAB on April 26, 2017, 09:35:10 AM
I was told this morning that the reason for the tariff on lumber was because the Canadians put a tariff on milk products going to Canada from the US.
Is there any truth to what I was told this AM?
Gerald

No.  Milk tariff is actually in the NAFTA agreement.  The timber tariffs just were forced to be abandoned because the US kept losing international court decisions on the tariffs.  Basically, they don't have unfair advantage according to international law (treaties US signed) so we don't really have a leg to stand on and it's been proven time and again.  This is a weak negotiating trick for renegotiating NAFTA
Liking Walnut

Hilltop366

Quote from: nativewolf on April 26, 2017, 08:44:57 AM
In Canada the logger, truck driver, mill employee has free medical, good disability,etc even though they pay high tax that is a huge income boost.  Can you imagine how much healthier & wealthier you'd be if you had free medical, free PT, etc?  For most, if not all, loggers and sawmill employees it would be a big boost.

I'm glad you followed the "free healthcare" statement by "even though they pay high tax".

The only way I see that people or their dependents get free health care is to own no property, earn nothing and spend nothing so they do not pay any property, income, or sales tax.

I wonder if anyone in Canada can say they pay no tax of any kind?


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