Fourth-generation lumberman Rob Dunn warns do-it-yourselfers and contractors who shop at his 10-store chain that they will be paying higher prices shortly for pine, fir and other softwood used in home construction. The reason: A bitter trade fight between Canada and the United States.
"Most of my customers are oblivious to trade — it's not in the sports section or on the front page yet — but contractors who'll do anything to save a dime will pay detailed attention once it hits them in the wallet," says Dunn, whose company has been "building dreams to a new level" in the Seattle area since 1907.
The reason Dunn's customers could take it on the chin: Despite President Bush's repeated pledge to "work for free trade, to lift people out of poverty throughout the world," his administration is planning to slap a 29 percent tariff on Canadian lumber starting in May unless a cross-border agreement on timber subsidies materializes.
The lumber fight could add an average $1,500 to the price of a house and put homeownership beyond the reach of 300,000 first-time buyers, according to the National Association of Home Builders.
"We're in the midst of a housing-led economic recovery, with housing activity providing millions of jobs on which thousands of businesses rely, from carpet manufacturers to furniture retailers," said Bobby Rayburn, a Jackson, Miss., builder and association officer. Why does government want to slap a tax increase on lumber now to drive up the cost of housing and all kinds of wood products for millions of consumers?"
The lumber fight follows the administration's decision to put a 30 percent tariff on foreign steel.
U.S. Steel Chairman Thomas Usher said the steel duties give his industry "breathing room" to modernize. But the 30 percent steel tariff will add $8 billion to what Americans pay for cars, stoves, refrigerators and other products, the Institute for International Economics estimates.
Meantime, candy makers fed up with passing the cost of U.S. sugar price supports onto customers are moving to climates where sugar costs half as much:
— Kraft is moving the one and only Life Savers plant from Holland, Mich., to Montreal in 2003.
— Brach Confections of Chattanooga, Tenn., shut one Chicago plant in favor of Mexico and is looking to contract out StarBrite mints, Milk Maid caramels and other movie-house staples south of the border by 2004.
Steel and lumber tariffs along with sugar subsidies appear targeted to please states including Ohio, Pennsylvania, West Virginia, Georgia, Florida and Oregon that are key to the 2002 congressional elections and House and Senate control.
But Europe is fighting politics with politics: The European Union is threatening $2 billion in sanctions against 361 products, from Florida orange juice to Wisconsin-made Harley-Davidson motorcycles, to textiles made in the Carolinas — all states where Republicans and Bush could feel election heat.
Although Commerce Secretary Don Evans assured a Washington gathering of textile executives, "You have a friend in us," textile magnate Roger Milliken, a major Republican donor who runs non-union Milliken & Co. mills in Spartanburg, S.C., wasn't reassured.
Milliken doesn't think Bush has gone far enough to protect textiles, so he has joined No. 1 textile union UNITE to fight Bush's request for streamlined trade authority to negotiate trade deals. The Senate is scheduled to take up the issue next week.
David Gullickson has a different take on tariffs. His company is paying millions of dollars more for imported steel because of the Bush tariffs.
Gullickson's 100-worker firm, which makes rolled steel tubing for the oil and gas industry in Texas, just announced an 8.2 percent price hike to customers rather than lay off employees or wait for the Commerce Department to grant waivers to Precision and other companies that rely on foreign specialty steel.
When it comes to tariffs and jobs, Gullickson said, Americans wind up paying either way for not-so-free trade.
