Trump says imports of wood products may pose national security threat to U.S. — raising fears in B.C.

B.C.’s forestry sector is awaiting the results of a U.S. Commerce Department investigation into the imports of wood products, which could impose further tariffs on the beleaguered industry.

It comes months after U.S. President Donald Trump launched a Section 232 investigation into whether importing timber, lumber and derivative products could pose a national security threat to the U.S.

The prospect of further tariffs on B.C.’s softwood lumber industry in particular — which is already dealing with a high 35 per cent duty imposed by the U.S. — could mean even more mill closures and job losses, experts say.

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“Lumber is just one of many sectors that could get impacted … maybe lumber gets a lower tariff, but plywood and OSB [engingeered wood] and pulp get a higher tariff. We don’t know,” said Russ Taylor, a forestry industry consultant and analyst.

“But, very clearly, this is a broad-based approach to how the U.S. can deal with applying tariffs based on whatever their logic is and, you know, [put] the chokehold on Canada,” he added.

Under Section 232 of the Trade Expansion Act of 1962, top U.S. officials can direct the Secretary of Commerce to look into suspected national security threats caused by imports. Within 270 days — roughly nine months — the secretary must present the president with a report and any recommendations for action. 

Trump has previously imposed tariffs based on Section 232 investigations for steel, aluminum, autos, and copper, which have been particularly damaging to the Canadian economy, leading to job losses and a drop in exports. 

The United States has long been the single largest market for B.C. lumber exports, representing over two-thirds of the market for the approximately $10-billion industry.

However, thousands of jobs have been lost as mills have been closing around the province in recent years, and major forestry companies are opening up new mills in the United States.

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Taylor — who lists Teal Cedar, West Fraser Timber and Western Forest Products among the nearly 300 forestry companies he’s worked for — says that, while the anticipated Section 232 tariffs could cause further mill curtailments in B.C., the U.S. forestry industry doesn’t yet have the capacity to fill the void that would be left by a lack of Canadian imports.

“We’re 22 to 24 per cent of U.S. consumption, so that can’t go away to zero because they’ll be short,” he said of the U.S. softwood lumber market.

“And believe me, the U.S. mills will be very happy to raise their price … at a discount to the Canadian price because that’s just free money in the short term for them,” he added.

Ultimately, Taylor says that the average U.S. homebuilder is going to be the one that ends up paying more as it becomes more expensive to import Canadian lumber due to tariffs and duties.

The Section 232 investigation into imported wood products was initiated in March, the same week Trump ordered a similar investigation into imported copper.

That particular probe was finished in July, and the U.S. president ordered a 50 per cent tariff on imported copper as a result.

Forests Minister Ravi Parmar told CBC News that the province’s understanding is that Trump has received the Section 232 investigation into wood products, and may be sourcing more data before releasing its results.

The investigation will be released this fall at the latest, according to the minister.

“But as we know, he has released information that has impacted our pharmaceuticals industry, our copper industry,” Parmar said.

“And so it very well could be just a matter of time that he puts another attack on our forest sector.”

Parmar previously said that the investigation could result in quotas, which could limit the amount of forestry products that could be brought into the U.S.

But Taylor says he has doubts over whether quotas would be imposed, saying the current state of affairs with high duties was already advantageous for the U.S.

“I’m not sure what else they would be looking for, except to say we can implement a tariff. Why don’t we?” he said.

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Parmar said it was hard to say exactly what Trump would do, saying the president “changes his mind on a regular basis,” but he was optimistic over recently-announced federal supports for the lumber industry as it awaits the investigation’s results.

“I think it’s important for the president to recognize that, as a man who ran on a mission to stand up for the middle class, he is adding the biggest tax on the middle class ever,” the minister said in late July.

“And that is a tax for people who are simply trying to build a home, or those that are trying to rebuild their homes.”