Tariffs Confirmed: 25% on Canada/Mexico Start March 4

Impact on Your Procurement Strategy

The confirmation of the 25% tariff on imports from Canada and Mexico, effective 12:01 AM EST on March 4, represents an immediate and unavoidable cost escalation for dimensional lumber buyers. This is a hard cost added to every thousand board feet (MBF) crossing the border, not a gradual market adjustment. Given current SPF pricing, this tariff translates to an estimated $120 to $150 per MBF added to the wholesale price of Canadian Softwood Plywood (SPF), depending on the current market rate. Procurement teams must immediately update their cost models and forward contracts to reflect this new reality.

The timing of the announcement (March 3rd, hours before implementation) means that buyers who failed to pull inventory across the border ahead of the deadline are now exposed to the full cost spike. This abrupt change has already spurred a massive rush for material already en route or staged near the border, leading to temporary tightness and premium pricing on immediate loads. Expect significant price volatility this week as Canadian mills and US distributors determine how quickly the full 25% new cost must be absorbed and passed along. Distributors in the Midwest and Northeast, who rely heavily on Western Canadian SPF for framing packages, will face the most acute supply pressure and cost inflation.

Strategically, buyers should quickly assess the viability of substituting domestic species. Increasing orders for Southern Yellow Pine (SYP) in the South/Southeast, or Hem-Fir in the West, can mitigate exposure to the tariff shockwave. However, increased demand for domestic species will inevitably put upward pressure on those prices as well, creating a generalized inflationary environment across all dimensional lumber products. Furthermore, the doubling of the tariff rate on Chinese imports (from 10% to 20%) adds a layer of broader economic uncertainty, signaling continued protectionist policy that could dampen broader construction demand later in the year, but the immediate lumber impact is purely supply-side cost inflation.

The immediate action is to secure necessary supply for Q2 demand, accepting the higher tariffed price, as waiting is unlikely to yield a quick price decline unless the policy is reversed (which seems unlikely short-term). Inventory risk management is critical: holding slightly higher inventory levels than usual might be necessary to buffer against potential supply chain friction caused by customs adjustments and logistical delays associated with the new tariff structure. Do not underestimate the friction this sudden policy change will introduce into cross-border logistics.

Key Takeaways

• Immediately lock in necessary SPF inventory for Q2, accepting the 25% tariff cost; expect an estimated $120-$150/MBF increase on Canadian lumber prices starting March 4.

• Increase orders for domestic species (SYP, Hem-Fir) to mitigate Canadian SPF exposure, but anticipate upward price pressure on those alternatives due to demand shift.

• Factor the new 25% tariff into all Q2 bidding and contracts immediately; waiting will only expose your business to unforeseen cost increases on delivered material.

Market Outlook

Pricing Trend: UP Confidence Level: HIGH Recommended Action: Urgently secure SPF supply this week, as the 25% tariff is now active. Immediately adjust Q2 pricing models to account for the $120-$150/MBF cost increase on Canadian material. Prioritize domestic SYP/Hem-Fir to hedge against further Canadian supply friction.

How LumberFlow Helps

LumberFlow’s Quote Comparison Dashboard allows buyers to instantly evaluate how the new 25% tariff affects total landed cost across multiple Canadian and domestic suppliers. Use automated price alerts to track the rapid price floor shift in SPF and monitor potential arbitrage opportunities with SYP.

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