By Ryan Dezember

Investors are betting that lumber producer Weyerhaeuser will benefit from 25% tariffs placed on its competition from Canada, bidding up the Seattle firm's shares amid a broad selloff.

The idea is that Weyerhaeuser-which owns 10.4 million acres of timberland in the U.S., logging licenses on another 14 million acres in Canada as well as mills in both countries-will fetch higher prices for the lumber and wood panels it makes in the U.S. without having to pay the tariffs that add to the cost of wood crossing the border.

About 80% of Weyerhaeuser's lumber milling capacity is in the U.S., and it sells most of what it makes in Canada in that country, Chief Executive Devin Stockfish told investors recently.

Weyerhaeuser does export a lot of its Canadian-made oriented strand boar, or OSB, into the U.S. But its a relatively small slice of the wood panels it produces overall in North America, Stockfish said.

The tariffs are expected to be layered on top of existing duties on softwood lumber imports from Canada, which are set to rise sharply this summer from the current average rate of 14.4%.

"On balance, I would expect you'd see prices go up somewhat, at least to the point where the Canadians and Canadian manufacturing that send their product into the U.S. would be margin positive," Stockfish said. "Otherwise, you would expect capacity to come out of the system."

Since about 25% of lumber and 30% OSB consumed in the U.S. comes from Canada, prices in the latter scenario are likely rise until demand falls to the reduced supply levels.

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March 03, 2025 17:06 ET (22:06 GMT)

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