Canadian lumber taxes could further increase new home costs 

While the current tariff war is justifiably on the minds of many Americans, another type of import tax may be coming later this summer that could have a big impact on new home construction.

An ongoing dispute over Canadian lumber: The U.S. is preparing to raise anti-dumping duties on Canadian softwood lumber from 14.5% to 34.45%, according to a U.S. Department of Commerce memo reported by Bloomberg. Anti-dumping levies are typically used when another country is believed to be subsidizing goods to sell them more cheaply. 

A final review of the levies will be published in August or September, with the rate increase taking effect then, according to a blog post from the National Association of Home Builders.

"For now, Canadian lumber tariffs stand at 14.5%, but members should be forewarned to expect higher tariffs later this year and plan accordingly," the NAHB wrote, noting that these duties are separate from other tariffs proposed by President Trump last week and a result of a decades-long trade dispute.

The NAHB has previously estimated that Trump's tariffs could increase the cost of building a new home by $9,200.

Targeting the biggest supplier: About 30% of softwood lumber used in the U.S. is imported, with more than 80% of those imports coming from Canada, according to reporting done by CNN. Softwood lumber is used in a variety of ways, including in home construction for framing, roofing and flooring.

The proposal to more than double the tax would be a blow to Canadians, but it would also mean "driving up housing costs for Americans who voted for a President who promised to lower costs," British Columbia Premier David Eby said in a written statement.

Can the US make up the difference? Some have praised the proposal, suggesting that it will give domestic lumber companies an opportunity to increase production, even if that means higher costs. Zoltan van Heyningen, executive director of the U.S. Lumber Coalition, said unfair practices have caused serious harm to the U.S. industry, and it has the capacity to pick up the slack.

"Sadly, the simple fact is that this 'affordable' softwood lumber is sharply below market rates, is massively dumped and subsidized, is costing real American families their jobs, and is counter to the President's goal of further solidifying the U.S. softwood lumber supply chain," van Heyningen said in a news release.

However, Liz Kovach, president of the trade organization Supply-Build Canada, said Canada supplies such a large share of lumber because the U.S. "simply can't produce it alone."

If Canadian suppliers start exporting less lumber, "it's going to spike the prices on the other side," Kovach told CTV News. "We'd like to get to that point where we have an agreement when we can just move forward and businesses can operate business as usual."