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Consumer Alliance Urges Congress to Support Affordable Homes, Kill Proposed Hidden Lumber Taxes

on 6/28/01.

A consumer alliance representing 95 percent of all of the lumber use and consumption in the U.S., today appealed to members of Congress to block support for a house bill introduced recently that would force a hidden tax on all softwood lumber purchased in the U.S. that comes from Canada. The bill, H. R. 2181, would impose mandatory trade restraints in the form of quotas and tariff surcharges on all shipments of lumber from Canada into the U.S., similar to the Softwood Lumber Agreement that expired March 31.
This amounts to an additional consumer tax on all softwood lumber used in home construction or remodeling, according to the American Consumers for Affordable Homes (ACAH), in a letter to all members of the House of Representatives. The alliance said that this proposed protectionist legislation only continues to hurt consumers, and will further reduce the level of affordable homes across America.
"The U.S. producers want to protect their markets and keep prices of softwood lumber artificially high by having the government impose a hidden tax on every purchase of lumber made in the U.S.," said Susan Petniunas, spokesperson for the ACAH, an alliance of 15 leading consumer and lumber user member organizations. "This proposed legislation is the most recent attack by lumber producers on consumers. After the expiration of the five-year quota agreement limiting softwood imports from Canada, the U.S. producers filed countervailing duty and antidumping petitions that would impose a tax of up to 78 percent on all softwood lumber imported into the U.S.
"Unfortunately, those proposed duties would add up to $4,000 to the cost of a new home, and, according to calculations used by the U.S. Census Bureau, would knock 1.2 million families out of the housing market -- they could not qualify for mortgages," Petniunas said. "This would dramatically impact first time homebuyers and buyers of manufactured housing, and be counter to the objective of building more affordable housing across our country."
H.R. 2181 was introduced by representatives, most of whom come from lumber producing states. "This parochial, protectionist viewpoint does not take into consideration that the jobs in homebuilding, selling and working with lumber, and downstream users of lumber such as window and bed frame manufacturers, outnumber the jobs in producing lumber in the U.S. by 25 to 1," Petniunas said. "It is time that the consumer gets represented, and that affordable housing becomes a priority."
Petniunas also pointed out that "a stick is not a stick. Southern Yellow Pine produced in the south is not a substitute in housing construction for Canadian Spruce Pine Fir. These two species are not interchangeable. They do not compete. Both have their own uses in home construction, and homebuyers and remodelers should not be penalized by artificial trade barriers such as those proposed in H.R. 2181."
She also said that trying to roll back imports to levels at the end of 1995, as proposed in the bill, "fails to take into consideration the growth in U.S. demand for softwood lumber, the growth in the housing market where most of it is used, and the reduction in availability of such lumber in the U.S."
The ACAH is an alliance of 15-organizations, representing approximately 95 percent of softwood lumber use in the U.S. ACAH members include CHEP USA, Citizens for a Sound Economy, Consumers for World Trade, Free Trade Lumber Council, The Home Depot, International Mass Retail Association, International Sleep Products Association, Leggett & Platt Inc., Manufactured Housing Association for Regulatory Reform, Manufactured Housing Institute, National Association of Home Builders, National Black Chamber of Commerce, National Lumber and Building Material Dealers Association, National Retail Federation, and the United States Hispanic Contractors Association.