\u201cIn January, I closed the mill for three months as we just did not know what was going to happen due to the tariffs,\u201d Gavronsky said. \u201cPricing lumber into the US was impossible.<\/p>\n
\u201cNormally we send about 30 to 40 per cent of our wood to the US, this year it is down to 10 per cent,\u201d he added.<\/p>\n
From the start of August to September 11, lumber prices tumbled 25 per cent, although they have recovered roughly 10 per cent in recent days. <\/p>\n
![\"Warren](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/09\/https:\/\/d1e00ek4ebabms.cloudfront.net\/production\/7a6ca917-65e9-4454-a974-43a7b59425d1.jpg\")
Warren Gavronsky said he saved his company by diversifying to rely less on the US \u00a9 Aaron Whitfield\/FT<\/p>\n
At current market prices \u201cthere\u2019s basically no Canadian producers that are making money right now\u201d, said Dustin Jalbert, senior economist for wood products at price reporting agency Fastmarkets.<\/p>\n
There is \u201cgoing to be a major wipeout coming here in the months ahead\u201d, if prices do not return, he added.<\/p>\n
Canada\u2019s forest products industry is one of the country\u2019s largest employers, operating in hundreds of communities and providing 200,000 direct jobs, according to the Forest Products Association of Canada. <\/p>\n
Last year, about two-thirds of the country\u2019s softwood production went for export, with 90 per cent of that heading to the US, according to government data. <\/p>\n
Trump has repeatedly railed against Canada\u2019s lumber industry, telling<\/a> the World Economic Forum in January, just days after he took office that \u201cwe don\u2019t need their lumber because we have our own forests\u201d. <\/p>\n In March he ordered a probe<\/a> into alleged dumping of Canadian lumber into the US as a \u201cnational security threat\u201d, prompting a sudden price drop. At the same time he issued an executive order<\/a> for an \u201cimmediate expansion of American timber production\u201d to reduce reliance on imports. <\/p>\n But many \u2014 including the US National Association of Home Builders \u2014 disagree with such protectionist policies, arguing lumber tariffs and duties act as a tax on builders, home buyers and consumers.<\/p>\n \u201cFor years, NAHB has been leading the fight against lumber tariffs because of their detrimental effect on\u00a0housing <\/a>affordability,\u201d it said in August.<\/p>\n But Zoltan van Heyningen, executive director of the US Lumber Coalition, representing large and small\u00a0producers, said Canadian producers simply \u201cpreloaded their warehouses\u201d and shipped too much lumber to the US in an attempt to beat duties and tariffs, flooding the market and depressing prices.<\/p>\n \u201cThey created a massive supply side shock to the system that was coupled with weaker demand,\u201d he said.<\/p>\n In British Columbia, where the forestry sector employed more than 50,000 workers and exports exceeded C$11.4bn in forest products last year, the effects are being felt on the ground.<\/p>\n \u201cWe are starting to see curtailments,\u201d said British Columbia\u2019s forestry minister Ravi Parmar. \u201cSo with those duties in place, it is certainly leading to significant challenges.\u201d<\/p>\n \u201cWe are also starting to see a decline in customers in the US, not just because of tariffs\u2009.\u2009.\u2009.\u2009but also with the fact that Donald Trump is taking the American economy fast on a highway into a recession,\u201d he said.<\/p>\n Mark Zandi, Moody\u2019s Analytics chief economist, said falling lumber prices are a symptom of a US economic slowdown and a struggling housing market.<\/p>\n \u201cYou\u2019ve got a lot of things coming together to conspire to weigh on demand affecting homebuilders,\u201d Zandi said, listing higher mortgage rates, higher house prices and a weaker job market. <\/p>\n US seasonally adjusted housing starts fell close to a five-year low in August, according to the Census Bureau.<\/p>\n The US economy is \u201cnot in a recession, but we\u2019re on the precipice of one\u201d, said Zandi. <\/p>\n David Elstone, managing director of Vancouver-based consultancy Spar Tree Group, who has worked in the forestry sector for more than 25 years, is downbeat on the prospects for lumber prices.<\/p>\n \u201cWe\u2019re going into the fall [autumn] and there\u2019s typically a slowdown then with less seasonal demand,\u201d he said.<\/p>\n Trump\u2019s protectionist policies are the latest offensive in a long-running dispute over wood between the US and Canada that dates back to the 1980s. <\/p>\n Central to the feud is the Canadian industry\u2019s ability to source trees from crown land \u2014 land owned by the federal or provincial government on behalf of the crown \u2014 and pay a \u201cstumpage fee\u201d set by provincial governments that is often lower than market prices, whereas the US industry buys from private land, which costs more. <\/p>\n The dispute is further complicated because many companies operate on both sides of the border, meaning they face US penalties and have to navigate currency fluctuations.<\/p>\n![\"Large](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/09\/https:\/\/d1e00ek4ebabms.cloudfront.net\/production\/64a63d62-672f-4d4d-ad97-b96310f42cc6.jpg\")
Waste wood pile at Just Cut It Sawmilling, in Terrace, British Columbia \u00a9 Aaron Whitfield\/FT<\/p>\n![\"Customers](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/09\/https:\/\/d1e00ek4ebabms.cloudfront.net\/production\/a5393069-123b-4189-9d85-3e45cf44bf6f.jpg\")
Lumber at a Home Depot store in Alhambra, California. US seasonally adjusted housing starts fell close to a five-year low in August \u00a9 Frederic J Brown\/AFP\/Getty Images<\/p>\n![\"Line](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/09\/https:\/\/d6c748xw2pzm8.cloudfront.net\/prod\/6b38cfd0-956b-11f0-8098-0ba0ee47aa56-standard.png\")
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