Chicago area lumber, gas prices could spike if President Trump's tariffs go ahead
EVANSTON, Ill. (CBS) -- After threats of sweeping tariffs against Mexico and Canada, President Trump announced a 30-day pause on the tariffs on both countries — narrowly avoiding a costly tariff war with both countries, for now.
The deal between President Trump and Canadian Prime Minister Justin Trudeau was announced Monday afternoon, while the deal with Mexican President Claudia Sheinbaum was announced earlier in the day.
But there was still concern late Monday about what happens next month if the tariffs go ahead at that point. The current arrangement is only good until March 1.
Gas and lumber are two of the big commodities that would potentially be impacted. The National Association of Home Builders warned that the cost of housing could soar and housing supply in general would take a hit.
Local lumber supply companies said they are already feeling an impact, including Bob Fisher—the third-generation owner of Evanston Lumber, at 1001 Sherman Ave. in Evanston. The company sources about 30% to 35% of its lumber from Canada.
Fisher said for the last week, Canadian mills have given Evanston Lumber notice that pricing will be 25% higher if the U.S. goes ahead with the tariffs. Some Canadian wholesalers also said Fisher they would not sell him anything until the issue is resolved.
While the can has been kicked down the road until next month, Fisher said the problem remains.
"It's going to put more pressure on us, which puts more pressure on, of course, our customers," he said.
While the rest of the lumber at Evanston Lumber comes from U.S. states such as Oregon and Washington, Fisher said switching to American lumber exclusively will not fix the problem.
"You would think that that would be an easy solution, but the U.S. producers — including some of the European producers—they're typically, they all kind of work in transit where they're working together," Fisher said. "If prices go up from Canada, you can be sure that all the domestic producers, all the U.S. producers, are going to be raising their prices accordingly."
Meanwhile, the U.S. is also the world's largest importer of Canadian crude oil, and Chicago drivers in particular could see the price at the pump rise as a result.
"The refiners in the Midwest — particularly in the Chicago area — are really dependent on that heavy, sour crude oil," said Denton Cinquegrana, chief oil analyst at OPIS, a Dow Jones company, "so this could have a pretty large impact, and depending on how long the tariffs last, can have a real impact on gasoline prices."
Cinquegrana explained that while gas prices typically go up this time of the year, he also expects a bump in the near term due to the fear of tariffs.
"Say It stretched out into the summertime, you know, the refiners in the Chicago area in the Midwest lose some margin. So now making gasoline is not profitable, so they reduce runs," he said. "Gasoline gets even more scarce, and prices go up some more."
Back in the lumber yard, Fisher said local business owners need some clarity — and soon.
"Our customers are going to be, they're just going to be confused about how to approach pricing product," he said. "I would love some answers quickly or a crystal ball."
Prime Minister Trudeau posted to X Monday that the proposed tariffs will be paused for 30 days. In exchange, Canada is implementing a $1.3 billion border plan — reinforcing the border with new choppers, technology and personnel, enhanced coordination with the U.S., and increased resources to stop the flow of fentanyl.
