Lumber Tariffs Create Mixed Bag Of Winners And Losers

May 10, 2017
Originally published on May 10, 2017 12:15 pm

An escalating trade war brewing between the United States and Canada could save timber mills in Montana, but at the cost of over 1,000 jobs north of the border in British Columbia.

It all started in April, when the Trump administration slapped tariffs on softwood lumber coming across the border, making them up to 24 percent more expensive. It’s something Montana lumber producers have been asking for, and it’s a test of Trump’s ‘America First’ trade policy. 

But Ron Toyota, the mayor of Creston, British Columbia, half a day’s drive from Missoula, says this trade war is more of a tug-of-war.

“Your government is trying to create jobs. Our government is trying to create jobs. And so, if we’re all trying to create the same job, somewhere along the line, someone wins and someone loses,” Toyota says.

And Canada is putting up a fight. They’ve threatened to ban or tax U.S. goods coming across the border, including Montana coal, and they’ve proposed aid packages to assist Canadian forestry workers and companies hurt by the duties.

And those hurt probably won’t include Canada’s largest lumber producers. They hedged their bets against potential tariffs in recent years by moving operations into states like South Carolina and Georgia. In fact, a University of British Columbia researcher says those big companies might actually benefit from the duties.

Instead, it’s the small, family-owned mills that’ll come out bruised.

“They’re the ones that’ve got the most to lose," Tanya Wall, a local politician and millworker in Creston, says. The duties, she says, could cut into profit margins and eventually cost money and jobs. And if the mills go, so could the businesses that rely on them.

Like a gas station I visit next to a sawmill in southeastern British Columbia.

Mill workers filter in and out, buying hotdogs and chips. Betty Anne Gordon, the store’s owner, is at the counter ringing people up. 

“I mean there’s three shifts working there, I believe there’s… I don’t know exactly how many are working right now but I believe its around 90 people or 100. You know, that’s a lot of people,” Gordon says.

She says the duties bring an air of uncertainty here.

“Nobody knows. Nobody knows what’s going to happen, right?”

But south of the border it’s a different story.

Gordy Sanders, a resource manager with Pyramid Mountain Lumber in Seeley Lake, Montana, says Canada took advantage of an expired trade deal in 2015 and sold lumber at unfairly low prices here in the U.S. And that hurt mills across western Montana.

“You know, the last couple of years, all of us — the small family-owned mills in the U.S. — have suffered financially,” Sanders says.

More than 250 Montana timber workers lost their jobs after the trade deal expired.

The duties, Sanders says, could help even the playing field and eventually save some mills, shifts and jobs across the state. But, he doesn’t expect it create a timber boom.

“It sheds a little light at the end of the tunnel," Sanders says.

But the light is dimming for timber jobs in Canada. And when I tell this to Steve Johnson, the sales manager at Pyramid Mountain lumber.

“Well, I don’t like to hear that. I don’t like to hear anybody losing jobs, but we were kinda in the same boat before the duties so … I hate to say it's us or them; I'd like for it to be us both, but we need to be competitive with each other too.," Johnson says.

The Trump administration is expected to announce a second round of duties on Canadian softwood lumber in June. And in Canada, Prime Minister Justin Trudeau says he’s, “carefully and seriously considering” shutting off U.S. access to a seaport in Vancouver." That port is a lifeline for a large coal mine in Decker, Montana, that sells most of its coal to Asia.

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