U.S. Lumber Industry Expands Production Amid Housing Slowdown
Event summary
- U.S. softwood lumber mills have added 8.7 billion board feet of production capacity since 2016, producing an additional 36 billion board feet of lumber.
- U.S. sawmills now supply nearly 75% of the U.S. market, with Canadian market share dropping from over 30% in 2016 to below 19% in 2026.
- Over $500 million in new investments have been announced since September 2025 due to President Trump's Section 232 tariffs.
- More than 2.5 billion board feet of additional production capacity is set to come online in the next two years.
The big picture
The U.S. lumber industry is experiencing a significant shift towards domestic production, driven by President Trump's trade policies. Despite a decline in housing starts since 2022, U.S. sawmills have increased their market share substantially, reducing reliance on Canadian imports. This strategic anomaly highlights the industry's response to trade enforcement measures and the potential long-term implications for market dynamics.
What we're watching
- Trade Policy Continuity
- Whether President Trump's trade policies will be maintained or altered, impacting U.S. lumber industry investments.
- Housing Market Recovery
- The pace at which housing starts rebound and how it affects demand for domestically produced lumber.
- Canadian Subsidies Impact
- How Canadian government subsidies influence the U.S. market share dynamics and trade practices.