JUST IN: CANADA’S LUMBER STRATEGY CHOKES U.S. HOUSING — RECORD PRICES EXPOSE TRUMP TARIFF BACKFIRE

Canada has effectively severed the United States’ most important lumber lifeline, and the consequences are now rippling through the American housing market. After Donald Trump imposed tariffs of up to 45.6% on Canadian softwood lumber, Prime Minister Mark Carney responded not with negotiations, but with a $5 billion restructuring plan designed to permanently end Canada’s dependence on U.S. buyers. The result is a historic shift: Canadian lumber is being locked into domestic contracts and new global markets, while U.S. builders face record prices and worsening shortages.

At the core of Canada’s move is a sweeping “Buy Canada” mandate. Federal agencies, Crown corporations, and government-funded construction projects are now required to purchase Canadian lumber exclusively, regardless of price. This single policy redirected billions of dollars in guaranteed demand to domestic mills. Combined with low-interest loans, expanded tariff-response funding, and provincial support programs, Canadian producers gained stability just as U.S. tariffs made exports south of the border economically irrational.

The impact on prices has been immediate and severe. Framing lumber in the United States has surged as high as $872 per thousand board feet, with analysts forecasting sustained levels in the mid-$500s to $600s well into next year. This surge is not driven by demand, but by supply loss. Canadian lumber that once flowed freely into the U.S. is now absorbed by Canadian government projects or redirected to Europe and Asia. American mills, despite recent capacity expansions, cannot replace the roughly 12 billion board feet of annual Canadian imports the U.S. housing sector relied on.

This supply shock is colliding head-on with America’s housing crisis. The United States is short an estimated 4.5 million homes, and construction costs are now structurally higher. Lumber alone accounts for 15–25% of the cost of building a home, meaning rising prices translate directly into higher sale prices. Industry groups estimate tariffs have already added at least $6,000 to the cost of a new home, pushing millions of buyers out of qualification ranges and forcing housing starts to decline despite overwhelming demand.

Meanwhile, Canada is executing a long-term pivot away from the United States. British Columbia mills are sending shipments to the United Kingdom, Europe, Japan, and South Korea, leveraging existing port and logistics infrastructure. Even at lower margins, these markets offer stability without tariff risk. Once these supply chains and buyer relationships are established, they are unlikely to reverse — even if U.S. tariffs are eventually reduced. Canadian lumber independence is no longer theoretical; it is operational.

The irony is stark. Trump’s tariffs were designed to protect American lumber producers, but instead they reshaped the market against U.S. interests. Canadian mills emerged leaner, government-backed, and diversified, while U.S. builders and homebuyers absorbed the long-term cost. As Canadian lumber locks into domestic and global markets, the United States faces a housing affordability crisis with no quick fix — a structural problem born not from scarcity of wood, but from the permanent consequences of trade policy weaponized too far.