Tax on Canadian lumber to impact home prices in Wisconsin - WKOW 27: Madison, WI Breaking News, Weather and Sports

Tax on Canadian lumber to impact home prices in Wisconsin

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WAUNAKEE (WKOW) -- Trade with Canada is getting trickier. President Trump has announced a new tax on lumber imported from Canada and he's planning one on milk, too, amid a dairy industry crisis in Wisconsin because of Canadian milk trade.

This will be felt here in Wisconsin. Last year, the state imported $191 million in softwood lumber, like pine. It's what makes up the frames of most houses and is used to build furniture. Now, it will cost 20 percent more if it's coming from Canada. 

Home builders are expecting consumers will end up spending around $1,000 more to build the average home.

"Tariffs are paid by the consumer, so either they're going to be absorbed by the local builder, the costs, or it's going to get passed on to the consumer," says Jenny Acker, with Acker Builders in Waunakee. "For every $1,000 that a home price goes up ... over 400 people in Dane County can no longer afford that house."

Acker, who is also president of the board of the Madison Area Builders Association, says the industry has been anticipating this tariff for several months, so they've already seen prices rise.

Builders buy materials from local lumber yards, which buy wood from mills that have factories on both sides of the border, so builders don't necessarily know whether they're using Canadian or American lumber. This comes as builders are already facing rising costs for materials and labor, which is common in spring, according to Acker. 

The U.S. does not produce enough to support the need for lumber across the country. Other states in different regions might not see as much of a change in prices, because homes in places like Florida are built with concrete, rather than pine frames.

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