Open this photo in gallery: A worker sorts lumber at the Gorman Brothers Lumber sawmill in West Kelowna, B.C., last month. The U.S. Department of Commerce claims Canadian producers dump softwood below market value.DARRYL DYCK/The Canadian Press
Canadian softwood producers are being hit with a new 10-per-cent tariff on their lumber shipments into the United States, raising the total levies to more than 45 per cent.
Earlier this year, U.S. President Donald Trump launched a probe into the global wood trade. His order cited Section 232 of the U.S. Trade Expansion Act, which allows him to invoke national security concerns to impose tariffs.
On Monday night, Mr. Trump issued a proclamation that imposed the new tariff on imports of softwood from Canada and other countries, effective Oct. 14.
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The U.S. Department of Commerce already levies anti-dumping duties totalling 35.16 per cent against most Canadian producers. The Commerce Department claims that Canadian producers dump softwood below market value, while it charges countervailing duties for what it sees as subsidized Canadian lumber.
Canada has repeatedly rejected the U.S. positions in the softwood trade battle, which dates back to the early 1980s.
“These tariffs will not improve U.S. national security – they will only drive up lumber costs, making housing even less affordable for American families,” Kurt Niquidet, president of the BC Lumber Trade Council, said in a statement on Tuesday.
“Placing additional tariffs on Ontario’s forest sector under the false flag of national security is a disturbing abuse of presidential power,” Ian Dunn, chief executive officer of the Ontario Forest Industries Association, said in a separate statement.
Imports into the U.S. of upholstered furniture, kitchen cabinets and vanities face tariffs of 25 per cent, also effective Oct. 14. On Jan. 1, 2026, tariffs on upholstered furniture would rise to 30 per cent, while those on kitchen cabinets and vanities would climb to 50 per cent, unless countries negotiate a different agreement with the U.S.
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U.S. Commerce Secretary Howard Lutnick “found that wood products are used in critical functions of the Department of War, including building infrastructure,” according to Mr. Trump’s proclamation.
Over the past dozen years, Canadian-based companies invested heavily in U.S. forests, where their softwood production is exempted from duties.
But lumber supplies that originate from sawmills in Canada are currently subject to an anti-dumping duty rate of 14.63 per cent and a countervailing duty rate of 20.53 per cent, totalling 35.16 per cent for most Canadian producers.
That’s up sharply from duties totalling 14.4 per cent in the previous final determination.
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Sawmills in Canada have seen their market share of U.S. lumber consumption steadily decline since 2016, eroded by U.S. duties and provincial timber constraints.
Softwood production from U.S. sawmills accounts for about 70 per cent of American domestic consumption.
While foreign contributions have fallen over the past decade, Canada still chips in 24 per cent and the rest is from other countries, mostly in Europe.
The influential U.S. Lumber Coalition has been lobbying for new tariffs to be layered on top of existing duties against Canadian producers. The coalition alleges that $1.2-billion in supports for Canada’s softwood industry announced by Prime Minister Mark Carney in August constitutes unfair subsidies.
The coalition also said it has documented numerous subsidy programs in Germany and Sweden.
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The accumulated duties paid by Canadian softwood producers since 2017 are now valued at more than US$7.2-billion, including interest on payments held in trust by the U.S.
Canadian sawmills that were shut down or had production scaled back in the past couple of years include those owned by major players such as West Fraser Timber Co. Ltd., Canfor Corp. and Interfor Corp.
Benchmark lumber prices are down more than 70 per cent from the record highs attained in the spring of 2021, when there was a do-it-yourself construction boom during the the COVID-19 pandemic, with consumers snapping up materials for decks, fences and home renovations.
The impact of lower lumber prices and reduced timber supplies already has been severely felt at smaller companies based in British Columbia. Teal-Jones Group and San Industries Ltd. filed for bankruptcy protection in 2024 under the Companies’ Creditors Arrangement Act.
Raymond James Ltd. analyst Daryl Swetlishoff said the stage has been set for additional decreases in lumber capacity in Canada over the next six to 12 months.
RBC Capital Markets analyst Matthew McKellar said the new tariffs will place added pressure on Canadian producers. “Tariffs will potentially accelerate curtailments of Canadian supply,” he said in a research note.
[SRC] https://www.theglobeandmail.com/business/article-canadian-softwood-tariff-trump/
