Shares of Potlatch Corp. /zigman2/quotes/208148498/composite PCH -1.92% dropped 1.7% in morning trade Tuesday, after the real estate investment trust which owns timberlands was downgraded at Raymond James, which cited valuation in the wake of underwhelming regulatory announcement regarding tariffs on Canadian lumber. Analyst Colin Mings cut his rating to market perform from outperform and removed his stock price target. The stock closed Monday at a four-year high of $48.20, above Mings' previous price target of $48. Late Monday, the Commerce Department announced it was considering additional fees on Canadian lumber imports that would mean some products could face duties as high as 30.88%. The announcement comes two months after the Trump administration moved to impose a 20% tariffs on Canadian softwood lumber. Mings said that while protectionist trade policies are a positive for the timber REIT sector, the preliminary duty rates were within expectations. "However, there was no upside surprise in yesterday's announcement relative to our forecast, and we believe the preliminary finding will underwhelm some investors expecting a more aggressive stance on the issue," Mings wrote in a note to clients. July lumber futures tumbled 1.8%. Among other timber REITs, shares of CatchMark Timber Trust Inc. /zigman2/quotes/202675836/composite CTT +0.12% slipped 0.3%, Deltic Timber Corp. lost 0.7% and Rayonier Inc. /zigman2/quotes/207968084/composite RYN -0.88% edged up 0.1%. Potlatch's stock has climbed 14% year to date, while the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.89% has gained 8.8%.