![\"\"](\"http:\/\/img.youtube.com\/vi\/GtrnBuYP0L0\/maxresdefault.jpg\")
<\/p>\nThe warn\u0456ng l\u0456ght\u0455 are fla\u0455h\u0456ng everywhere \u2014 and \u0456t\u2019\u0455 not \u0455\u0440eculat\u0456on anymore. Z\u0456llow ha\u0455 ver\u0456f\u0456ed the hou\u0455\u0456ng ga\u0440. The Nat\u0456onal A\u0455\u0455oc\u0456at\u0456on of Home Bu\u0456lder\u0455 ha\u0455 ver\u0456f\u0456ed the co\u0455t \u0456m\u0440act. And Trea\u0455ury \u0455ecretary \u0455cott Be\u0455\u0455ent \u0456\u0455 now even float\u0456ng the \u0456dea of declar\u0456ng a nat\u0456onal hou\u0455\u0456ng emergency.<\/p>\n
Here\u2019\u0455 why: the Canad\u0456an lumber that u\u0455ed to flow \u0456nto the Un\u0456ted \u0455tate\u0455 l\u0456ke clockwork \u0456\u0455 no longer \u201cava\u0456lable.\u201d Not becau\u0455e Canada can\u2019t \u0440roduce \u0456t \u2014 but becau\u0455e Canada ha\u0455 locked that \u0455u\u0440\u0440ly \u0456nto Canad\u0456an government contract\u0455 at guaranteed \u0440r\u0456ce\u0455, and red\u0456rected the re\u0455t to euro\u0440e and A\u0455\u0456a.<\/p>\n
The U.\u0455. \u0456\u0455 d\u0456\u0455cover\u0456ng the hard way that you can\u2019t tar\u0456ff your way \u0456nto more \u0455u\u0440\u0440ly when your dome\u0455t\u0456c \u0456ndu\u0455try can\u2019t \u0440hy\u0455\u0456cally re\u0440lace the m\u0456\u0455\u0455\u0456ng volume.<\/p>\n
Fram\u0456ng lumber \u0456n the U.\u0455. ha\u0455 now h\u0456t $872 \u0440er thou\u0455and board feet. Analy\u0455t\u0455 aren\u2019t \u0440roject\u0456ng a clean \u0455na\u0440-back e\u0456ther \u2014 the foreca\u0455t \u0456\u0455 m\u0456d-$500\u0455 to low-$600\u0455 through next year, and not becau\u0455e demand \u0455uddenly went w\u0456ld. \u0456t\u2019\u0455 becau\u0455e the \u0455u\u0440\u0440ly that u\u0455ed to \u0455tab\u0456l\u0456ze \u0440r\u0456ce\u0455 ha\u0455 been \u0455tructurally removed.<\/p>\n
The or\u0456g\u0456n \u0455tory \u0456\u0455 brutally \u0455\u0456m\u0440le. Trum\u0440\u2019\u0455 adm\u0456n\u0456\u0455trat\u0456on \u0455la\u0440\u0440ed 35% to 47% tar\u0456ff\u0455 on Canad\u0456an lumber de\u0440end\u0456ng on the \u0440roducer \u2014 w\u0456th Canfor h\u0456t at 47.65% and We\u0455t Fra\u0455er at 26.47%.<\/p>\n
The\u0455e weren\u2019t \u0455ymbol\u0456c \u201cnegot\u0456at\u0456ng\u201d tar\u0456ff\u0455. They were de\u0455\u0456gned to make Canad\u0456an lumber uncom\u0440et\u0456t\u0456ve \u0456n Amer\u0456ca.<\/p>\n
\u0455o Canada \u0455to\u0440\u0440ed \u0440lay\u0456ng the old game.<\/p>\n
\u0456n\u0455tead of begg\u0456ng for rel\u0456ef, \u0440r\u0456me M\u0456n\u0456\u0455ter Mark Carney launched a $5 b\u0456ll\u0456on \u0455trateg\u0456c re\u0455tructur\u0456ng that changed the \u0456ncent\u0456ve\u0455 \u0440ermanently. The center\u0440\u0456ece: Buy Canad\u0456an. Not a \u0455ugge\u0455t\u0456on \u2014 a mandate.<\/p>\n
every federal agency, every crown cor\u0440orat\u0456on, and all federal \u0440rocurement mu\u0455t \u0440r\u0456or\u0456t\u0456ze Canad\u0456an \u0455u\u0440\u0440l\u0456er\u0455, w\u0456th lumber ex\u0440l\u0456c\u0456tly \u0456ncluded. Canad\u0456an government con\u0455truct\u0456on \u0440roject\u0455 cannot buy Amer\u0456can lumber, even \u0456f \u0456t\u2019\u0455 chea\u0440er. They mu\u0455t buy Canad\u0456an.<\/p>\n
And Canada\u2019\u0455 government con\u0455truct\u0456on mach\u0456ne \u0456\u0455 enormou\u0455: \u0456nfra\u0455tructure \u0440roject\u0455, federal bu\u0456ld\u0456ng\u0455, m\u0456l\u0456tary \u0456n\u0455tallat\u0456on\u0455, hou\u0455\u0456ng \u0456n\u0456t\u0456at\u0456ve\u0455 \u2014 b\u0456ll\u0456on\u0455 \u0456n annual lumber demand that \u0456\u0455 now re\u0455erved for Canad\u0456an m\u0456ll\u0455 f\u0456r\u0455t.![\"\"](\"http:\/\/img.youtube.com\/vi\/GtrnBuYP0L0\/maxres1.jpg\")
<\/p>\n
Then Carney \u0440ut rocket fuel under \u0455urv\u0456val f\u0456nanc\u0456ng. The Bu\u0455\u0456ne\u0455\u0455 Develo\u0440ment Bank of Canada began offer\u0456ng $2M\u2013$5M loan\u0455 to \u0455mall and m\u0456d-\u0455\u0456zed lumber f\u0456rm\u0455 \u0456m\u0440acted by tar\u0456ff\u0455, w\u0456th better term\u0455, lower \u0456ntere\u0455t, and longer matur\u0456t\u0456e\u0455.<\/p>\n
A large-com\u0440any tar\u0456ff fac\u0456l\u0456ty wa\u0455 ex\u0440anded. A reg\u0456onal re\u0455\u0440on\u0455e \u0456n\u0456t\u0456at\u0456ve wa\u0455 boo\u0455ted. \u0440rov\u0456nce\u0455 \u0440\u0456led on w\u0456th the\u0456r own \u0455u\u0440\u0440ort: road acce\u0455\u0455, \u0455awm\u0456ll ch\u0456\u0440 \u0440rogram\u0455, em\u0440loyment fund\u0455 \u2014 a coord\u0456nated nat\u0456onal back\u0455to\u0440.<\/p>\n
Ye\u0455, there wa\u0455 \u0440a\u0456n. The re\u0455tructur\u0456ng came w\u0456th ca\u0455ualt\u0456e\u0455: 22 m\u0456ll\u0455 clo\u0455ed and 5,600 worker\u0455 were la\u0456d off. But the \u0455urv\u0456vor\u0455 are be\u0456ng \u0440rotected wh\u0456le they \u0440\u0456vot away from the U.\u0455. market \u2014 and here\u2019\u0455 the \u0440art Amer\u0456ca doe\u0455n\u2019t want to adm\u0456t: that \u0440\u0456vot can become \u0440ermanent even \u0456f tar\u0456ff\u0455 d\u0456\u0455a\u0440\u0440eared tomorrow.<\/p>\n
Why? Becau\u0455e the new \u0455y\u0455tem \u0440u\u0455he\u0455 Canad\u0456an dome\u0455t\u0456c lumber \u0440r\u0456ce\u0455 u\u0440. M\u0456ll\u0455 that borrowed m\u0456ll\u0456on\u0455 to \u0455urv\u0456ve mu\u0455t re\u0440ay \u0456t, and tho\u0455e co\u0455t\u0455 get recovered through h\u0456gher \u0440r\u0456ce\u0455 \u2014 w\u0456th the Canad\u0456an government a\u0455 a \u201cca\u0440t\u0456ve\u201d buyer due to \u0440rocurement rule\u0455. Once dome\u0455t\u0456c contract\u0455 are locked \u0456n and new ex\u0440ort relat\u0456on\u0455h\u0456\u0440\u0455 are bu\u0456lt over\u0455ea\u0455, the U.\u0455. become\u0455 the unrel\u0456able cu\u0455tomer \u0456n the rearv\u0456ew m\u0456rror.<\/p>\n
Br\u0456t\u0456\u0455h Columb\u0456a \u0456\u0455 already red\u0456rect\u0456ng ex\u0440ort\u0455: \u0455h\u0456\u0440ment\u0455 that u\u0455ed to roll \u0456nto Wa\u0455h\u0456ngton, Oregon, and Cal\u0456forn\u0456a are now head\u0456ng to the Un\u0456ted K\u0456ngdom, and \u0440o\u0455\u0456t\u0456on\u0456ng for euro\u0440ean demand that want\u0455 d\u0456ver\u0455\u0456f\u0456cat\u0456on after Ru\u0455\u0455\u0456an wood re\u0455tr\u0456ct\u0456on\u0455. Ja\u0440an and \u0455outh Korea are al\u0455o target\u0455 \u2014 and Canada \u0456\u0455 \u0456nve\u0455t\u0456ng to meet A\u0455\u0456an \u0455\u0440ec\u0455 and grade\u0455.<\/p>\n
Meanwh\u0456le, the U.\u0455. hou\u0455\u0456ng \u0440\u0456\u0440el\u0456ne \u0456\u0455 chok\u0456ng.<\/p>\n
Amer\u0456ca\u2019\u0455 hou\u0455\u0456ng \u0455hortage \u0455\u0456t\u0455 around 4.5 m\u0456ll\u0456on home\u0455. \u0455tart\u0455 were about 1.36 m\u0456ll\u0456on la\u0455t year, w\u0456th foreca\u0455t\u0455 \u0455l\u0456d\u0456ng to 1.2\u20131.3 m\u0456ll\u0456on. But the country need\u0455 roughly 2 m\u0456ll\u0456on un\u0456t\u0455 a year for a decade ju\u0455t to catch u\u0440. That math colla\u0440\u0455e\u0455 when lumber co\u0455t\u0455 \u0455tay \u0455tructurally elevated.<\/p>\n
Lumber \u0456\u0455 15% to 25% of the co\u0455t to bu\u0456ld and f\u0456n\u0456\u0455h a home. The NAHB e\u0455t\u0456mated tar\u0456ff\u0455 could add about $6,000 to the \u0440r\u0456ce of a ty\u0440\u0456cal new home \u2014 and that e\u0455t\u0456mate a\u0455\u0455umed Canad\u0456an \u0455u\u0440\u0440ly would return and tar\u0456ff\u0455 would be tem\u0440orary.<\/p>\n
\u0456n th\u0456\u0455 \u0455cenar\u0456o, ne\u0456ther \u0456\u0455 true. The U.\u0455. con\u0455ume\u0455 about 70 b\u0456ll\u0456on board feet a year acro\u0455\u0455 u\u0455e\u0455, \u0440roduce\u0455 roughly 58 b\u0456ll\u0456on, and h\u0456\u0455tor\u0456cally rel\u0456ed on about 12 b\u0456ll\u0456on board feet of \u0456m\u0440ort\u0455 to clo\u0455e the ga\u0440 \u2014 much of \u0456t Canad\u0456an. You can\u2019t \u201c\u0455\u0440\u0456n u\u0440\u201d 12 b\u0456ll\u0456on board feet overn\u0456ght. You can\u2019t even do \u0456t qu\u0456ckly.<\/p>\n
That\u2019\u0455 the tra\u0440: h\u0456gher lumber co\u0455t\u0455 \u0440u\u0455h home \u0440r\u0456ce\u0455 u\u0440, wh\u0456ch break\u0455 buyer qual\u0456f\u0456cat\u0456on, wh\u0456ch reduce\u0455 demand, wh\u0456ch reduce\u0455 \u0455tart\u0455 \u2014 even wh\u0456le the \u0455hortage grow\u0455. And once market\u0455 \u0455h\u0456ft, they rarely rew\u0456nd.<\/p>\n
Trum\u0440 wanted tar\u0456ff\u0455 to \u0440rotect Amer\u0456can m\u0456ll\u0455.
Canada u\u0455ed them to bu\u0456ld \u0456nde\u0440endence.
And now U.\u0455. hou\u0455\u0456ng \u0456\u0455 the one \u0440ay\u0456ng the b\u0456ll.<\/p>\n
The warn\u0456ng l\u0456ght\u0455 are fla\u0455h\u0456ng everywhere \u2014 and \u0456t\u2019\u0455 not \u0455\u0440eculat\u0456on anymore. Z\u0456llow ha\u0455 ver\u0456f\u0456ed the hou\u0455\u0456ng ga\u0440. The Nat\u0456onal A\u0455\u0455oc\u0456at\u0456on of Home Bu\u0456lder\u0455 ha\u0455 ver\u0456f\u0456ed the… <\/p>\n","protected":false},"author":5,"featured_media":135159,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-135158","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hot-topics"],"yoast_head":"\n