Here are five things you need to know this morning
Timberrrrrr! Another day, another tariff threat for markets to digest. This time it’s lumber getting whipsawed, as U.S. President Donald Trump says he is going to bring in tariffs on Canadian lumber imports to the U.S. soon. Speaking to reporters at an event in Miami on Wednesday evening, Trump added lumber to the list of items he plans to slap tariffs on in the near future. As a well-known hewer of wood – and drawer of water, as the old saying goes – Canada would feel any such policy directly, but perhaps not as painfully as you might think. As is the case with oil, lumber is one front in the trade war where Canada can do a lot of collateral damage of its own. Currently, Canada is the source for about a quarter of the lumber that the U.S. consumes every day, and while the U.S. theoretically has enough trees to meet its own needs, ramping things up both in terms of the logs and the capacity to process them would be next to impossible in the short term, or without raising the ire of local opposition or running afoul of regulations. Recall during the pandemic when Canadian lumber prices spiked by more than 300 per cent, yet U.S. buyers kept buying. With demand like that, perhaps the U.S. should open itself up to the idea of becoming Canada’s 11th province? Just a thought. That’s for others to decide but in the meantime, we’ll watch the movement in lumber company shares today as investors ponder the various permutations.