Tariff Threat Roils Lumber Markets: Prepare for 25% Levy

Impact on Your Procurement Strategy

The immediate impact of the March 2 executive order is extreme pricing volatility and supply uncertainty. The Department of Commerce is directed to launch an immediate investigation into whether lumber imports pose a national security threat, laying the legal groundwork for potential new tariffs. Crucially, the administration has previously eyed tariffs as high as 25% on lumber. Since the Commerce Department has been instructed to move quickly, buyers must treat this potential cost increase as an imminent threat, not a distant possibility.

This new investigation is particularly disruptive because it occurs just before the scheduled March 4 start date for existing reciprocal tariffs on Canada and Mexico. The official declined to clarify if the resulting tariffs would be additive, but the market will price in the worst-case scenario: a cumulative cost hike that could easily add $120 to $150 per thousand board feet (MBF) to imported SPF products. For distributors sourcing Western SPF, this translates directly to immediate price escalation and a scramble for domestic alternatives. Expect mill lead times for common dimensional stock (2x4, 2x6) to stretch out 2 to 3 weeks immediately as buyers engage in panic buying to front-run the anticipated ruling.

The geographic impact will be most severe in the Northeast and Midwest, which heavily rely on Canadian SPF imports. Buyers in these regions must urgently assess their inventory levels. Holding off on purchases, hoping the investigation takes months, is a high-risk strategy given the administration's stated intent to move quickly. The cost of carrying slightly higher inventory now is far less than absorbing a 25% tariff increase on essential stock later this quarter. The threat of tariffs on derivative products, such as kitchen cabinetry, also signals potential secondary demand shocks in the manufactured wood goods sector.

On the supply side, a second executive order focusing on streamlining regulatory permitting for timber salvage harvesting offers a positive long-term signal for domestic supply. However, this measure will take months, if not years, to translate into meaningful volume relief. Therefore, the short-term procurement focus must remain entirely on mitigating the immediate and unpredictable trade policy risk. Buyers should prioritize locking in confirmed shipments and avoiding speculative quotes that lack firm delivery dates.

Key Takeaways

• Secure critical SPF inventory immediately before the market fully prices in the potential 25% tariff risk announced by the Commerce investigation.

• Anticipate 2-3 week extensions on Western SPF lead times as panic buying tightens mill availability; prioritize confirmed shipments over speculative quotes.

• Hedge risk by diversifying into domestic SYP or Hem-Fir, recognizing that substitution demand will likely drive those prices up in the near term.

Market Outlook

Pricing Trend: UP Confidence Level: HIGH Recommended Action: Front-load Q2 SPF inventory requirements immediately. Assume the new investigation is laying the groundwork for a 25% tariff additive to the March 4 levies. Lock in any available supply this week to avoid the inevitable price spike.

How LumberFlow Helps

Use LumberFlow's multi-supplier RFQ system to quickly source and compare pricing from both Canadian and US domestic mills to hedge against tariff uncertainty. Use our Historical Price Tracker to benchmark current offers against pre-investigation pricing, ensuring you aren't overpaying during the volatility.

Ready to stay ahead of market trends? Book a consultation with our team to see how LumberFlow's procurement platform transforms dimensional lumber buying.