Their outrage stems from the US International Trade Commission's unanimous finding yesterday that there is a "reasonable indication" that domestic timber companies are being hurt by subsidies that the Canadian government provides to producers headquartered north of the border. The finding paves the way for the Commerce Department to slap a stiff new tariff on lumber products imported from Canada, perhaps as early as next month.

Trade officials are being pressured to initiate a tariff of up to 78% by the Coalition for Fair Lumber imports, a group of US lumber producers that accounts for roughly two-thirds of all domestic sales. But the tariffs are opposed by most developers and the National Association of Home Builders, who say it could easily add more than $100,000 to the cost of building a mid-size apartment complex or a typical 25-house tract.

"It's dubious for US producers to suggest that the Canadians aren't playing far," NAHB economist Michael Carliner tells GlobeSt.com, adding that Federal Reserve Chairman Alan Greenspan has also spoken out against the proposed new taxes. "If the tariffs go through, it's going to raise builders' costs and worsen the housing affordability crisis."

Carliner notes that lumber prices have already soared from $263 per 1,000 board feet in January to $390 per 1,000 board feet today. About 8,000 board feet are needed to build a typical apartment unit and about 15,000 board feet go into an average-sized house, he says.

Yesterday's ruling by the ITC will now be forwarded to the Commerce Department, which could decide at a meeting scheduled for June 26 to initiate the tariffs. Bruce Smith, NAHB's president and a California home builder, hopes regulators or Congress will back away from levying new taxes on the imports and instead support the builders' position.

"We are confident that if the petitions are fairly evaluated in an open manner, and the concerns of American consumers and the more than 6 million workers in home building and other lumber-using industries are considered, the protectionist measures urged by a few large lumber producers will fail and free lumber trade between the U.S. and Canada will prevail," Smith said in a statement released today.