As per Reuters report, U.S. President Donald Trump has launched a new trade inquiry that would impose further tariffs on foreign lumber imports, furthering tensions in trade with Canada and other exporting countries. The action follows as part of an overall plan to defend U.S. industries under the Trade Expansion Act of 1962, previously used to uphold tariffs on steel and aluminum imports.
In a memorandum signed on Saturday, Trump directed Commerce Secretary Howard Lutnick to investigate whether lumber imports pose a national security risk under Section 232 of the Act. The investigation, to be completed within 270 days, will assess the impact of imported lumber and derivative products such as furniture, including kitchen cabinets made from U.S.-exported wood.
Escalating Trade Tensions
The order also requires the Commerce Department to speed up the approval process for logging on public lands and increase salvage efforts for trees that have fallen, with a goal of increasing domestic lumber supply within 90 days. The administration’s action seems to be in reaction to complaints that Canadian lumber manufacturers are getting an unfair advantage through subsidies, especially through reduced stumpage fees on public lands versus U.S. market rates.
White House trade adviser Peter Navarro justified the investigation, accusing lumber exporters from Canada, Germany, and Brazil of “dumping” products into the U.S. market, undermining American economic prosperity and national security. “That stops today with a pair of Trumpian actions designed to bolster both supply of and demand for American timber and lumber,” Navarro stated during a press briefing.
Potential Economic Impacts
If the new tariffs are approved, they would be in addition to the existing 14.5% combined anti-dumping and anti-subsidy duties on Canadian softwood lumber. Additionally, Trump has threatened a 25% tariff on all Canadian and Mexican goods, which could take effect next week unless these countries intensify border security and efforts to curb fentanyl trafficking.
Home builders have criticized these tariffs, arguing that they contribute to rising construction costs and housing inflation in the U.S. Given that most U.S. lumber is sourced from private lands at market prices, the impact of the new measures on domestic pricing remains uncertain.
Implications for India
India, being one of the major importers of American wood products, may be hit indirectly by these tariffs. Increased U.S. lumber costs may prompt Indian industries to look for alternative providers or absorb higher expenses for wood-based imports. Second, the possible interruption in global trade flows might create greater commodity price volatility, which in turn would impact India’s real estate and furniture industries. Additionally, with the U.S. becoming more protectionist, India may struggle to negotiate good trade terms with the U.S. in future trade talks.
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