California Republican Congressman Gary Miller, a homebuilder and developer, today joined with consumer groups in calling for an end to efforts to impose punitive duties on softwood lumber imports from Canada that are essential for the U.S. housing market. Nearly one third of all lumber used for homes has to be imported since domestic supply can not meet demand.
"It is important that our government look at the impact of its trade decisions on consumers," Miller said. He spoke to more than 200 lumber yard owners at the National Lumber and Building Material Dealer's legislative conference. "When we act to put tariffs in place against Canadian wood, we all know who pays -- the consumers. The proposed tariffs in this instance would put 29 percent sales tax on all Canadian lumber in a home. That clearly add nearly $1,500 per house, and will price close to 450,000 families out of the housing market since they cannot get mortgages."
"We must balance trade policy with domestic issues and needs," Miller added.
"Affordable housing is a very critical issue for America. We should not punish consumers in the interest of a handful of U.S. forest companies. The U.S. must have Canadian Lumber to survive, and we will continue to import it. It would be wrong for the U.S. to impose duties on that essential lumber that is no threat to the U.S. industry, at consumer expense."
Led by International Paper, Potlatch, Plum Creek, Sierra Pacific, Temple Inland, and southern land owners, forming the Coalition for Fair Lumber Imports, filed petitions a year ago alleging that they had been harmed by Canadian softwood lumber imports and asking for countervailing and antidumping duties. The U.S. Commerce Department said it will impose the duties pending a decision by the International Trade Commission (ITC) which is expected May 2.
Mike Fritz, a lumber dealer from Massachusetts and president of NLBMDA, participated in the March ITC hearing. "We hope that our input helped to educate the ITC commissioners about the important impacts trade decisions have on U.S. consumers. We continue to believe, as we have for over a decade, that the input of US consuming industries is vitally important to the understanding of the softwood lumber marketplace in the U.S., especially when it comes to providing insight into the everyday use and application of different species of lumber. Our nation's annual demand for Canadian spruce pine fir is well-known and well-documented throughout the U.S. consuming industries.
"As national demand for affordable housing continues to grow year by year, we further realize the importance of ensuring that a secure, stable supply of Canadian softwood is available for interior framing," Fritz added. "We continue to hope that the handful of U.S. producers seeking to block Canadian product eventually realize the potentially serious damage they may do to the U.S. housing market by continually injecting uncertainty and volatility into the market for Canadian framing lumber. For over twenty years these producers have sought special protection from the U.S. government while other components of the industry devote their time to adapting to the globalization of our marketplace.
"As the process moves forward, we will continue our efforts to educate decision makers about the important differences between lumber species, and we will continue working to ensure an end to the market volatility that has plagued lumber trade for decades," Fritz added.
Michael Carliner, an economist with the National Association of Home Builders said that any tariff acts as a tax on U.S. homebuyers, renters and consumers, creating a very substantial burden on them. "Because there are not enough trees available to produce lumber for home building in the U.S., Canadian lumber imports are absolutely vital for the construction of affordable new homes and to make improvements on existing homes in America" Carliner said.
"While the tariffs will boost lumber prices and profits of domestic producers at the expense of U.S. consumers, the number of jobs in the U.S. lumber industry will remain limited by the finite domestic timber supply," Carliner added, noting that housing and related industries that use softwood lumber employ more than 7 million American workers and outnumber U.S. lumber-producing workers by 30 to 1.
Speaking on behalf of the International Mass Retail Association, Jonathan Gold, director of international trade policy, joined in the call on the Bush administration not to let duties be imposed on Canadian softwood lumber. IMRA
-- the world's leading alliance of retailers and their product and service suppliers -- is committed to bringing price-competitive value to the world's consumers. IMRA members represent over $1 trillion in sales annually and operate over 100,000 stores, manufacturing facilities, and distribution centers nationwide and employ millions of Americans. IMRA's membership includes some of the country's largest home centers and lumber dealers.
"These companies represent the largest lumber dealers in the U.S. The lumber that these companies stock is determined not only by price, but by consumer preference," Gold said. "Prices for lumber are driven by supply and demand. Canadian lumber producers do not dictate the price that domestic producers are able to get on the market. The housing market is a factor driving movements in lumber prices."
"If Canadian lumber becomes very much more expensive for our members' customers, they will have no choice but to turn to more European producers for consistent supply to satisfy their demand for quality," Gold said. "Such a price change would not cause our customers to switch to southern yellow pine for framing where Canadian softwood is clearly their choice. These two species are simply too different to be interchangeable."
Susan Petniunas, spokesperson for an alliance of 17 national organizations and companies, American Consumers for Affordable Homes (ACAH), which has been fighting the trade action, said: "It is very sad that a segment of U.S. forestry producers and land owners have been able to get our government to impose such a ridiculous level of duties on our consumers," said. "We believe that the President should intervene and stop this process. Canada is our most important trading partner and strong supporter of U.S. government global actions. We should not allow our own government to impose a new sales tax on consumers so that a handful of companies can improve their bottom lines."
She noted that the alliance hoped that the ITC will evaluate the case on its merits, not because of political pressures. "The Commerce Department only found two instances in more than $10 billion in Canadian lumber sales where the product was directly competing with southern yellow pine," Petniunas said. "The U.S. case if very flawed."
NLBMDA, NAHB, IMRA are members of the ACAH. Other members include: American Homeowners Grassroots Alliance, Catamount Pellet Fuel Corporation, CHEP USA, Citizens for a Sound Economy, Consumers for World Trade, Free Trade Lumber Council, The Home Depot, International Sleep Products Association, Leggett & Platt Inc., Manufactured Housing Association for Regulatory Reform, Manufactured Housing Institute, National Black Chamber of Commerce, National Retail Federation, and the United States Hispanic Contractors Association.