How Trump’s lumber tariffs made a bad situation worse in B.C.

How Trump’s lumber tariffs made a bad situation worse in B.C.

45% tariffs on Canadian softwood lumber the latest chapter in a decades-long dispute

More than 20 lumber mills closed across B.C. over the last three years. Billions in wood products affected by U.S. tariffs. Tens of thousands of jobs lost in Canada.

The state of B.C.'s forestry industry is, by most accounts, dire.

While there are many factors driving the decline, recent U.S. tariffs haven't helped.

But Donald Trump is hardly the first U.S. president whose government has imposed steep duties on Canadian lumber. The tariffs are the latest chapter in a dispute that's been going on for more than four decades.

'Absolutely worst situation': B.C. forestry sector fears it will be hardest-hit by U.S. tariffs

What is softwood lumber and why is it important?

Softwood lumber is manufactured from coniferous trees. In Canada, this is mostly spruce, pine and fir.

It's used in residential and non-residential construction, repair and remodelling and furniture manufacturing, according to Natural Resources Canada. The byproducts supply industries including pulp and paper, wood-based panels and bioenergy.

In 2024, softwood lumber made up 98 per cent of Canada's wood production, according to Statistics Canada.

That year, Canada exported just over half — 58 per cent — of its softwood lumber to the U.S.

Almost a third of that – 32 per cent – came from the B.C. Interior, which was the country's leading producer, according to Statistics Canada.

In 2024, nearly half of American wood product imports — worth about $11 billion US — came from Canada, according to the U.S. Congress.

It boils down to differences in how much Canadian and American producers have to pay for access to wood, according to Export Development Canada (EDC).

In Canada, 94 per cent of forested lands are publicly owned, EDC says. Governments charge companies a fee, known as stumpage, for logging access to Crown land.

In the U.S., more than half of forested land (58 per cent) is privately-owned, according to the U.S Congress. Access prices are generally determined by the market, rather than government.

The U.S. has long argued that the low stumpage fees charged by Canadian governments amount to a subsidy that allows Canadian lumber to be sold in the U.S. at below-market value.

But Zoltan van Heyningen, the executive director of the U.S. Lumber Coalition, says these differences account for "one tiny, small aspect of Canadian subsidies," arguing the Canadian government has spent billions in taxpayer dollars in the last year supporting the industry.

In his view, the problem is one of chronic excess supply on the Canadian side, which ends up in the U.S. and drives down prices, harming American producers.

How long has the dispute been going on?

The American lumber industry first made this argument to the U.S. Commerce Department in 1982, out of concern over Canada's growing share of the U.S. market. The request was for tariffs on Canadian softwood lumber to level the playing field.

The first bilateral negotiations began in 1986. The two countries signed an agreement later that year, under which Canada agreed to impose a 15 per cent tax on its own exports of some softwood lumber to the U.S.

Over the next three decades, the dispute generally involved the U.S. imposing tariffs on Canadian softwood lumber, and Canada increasing stumpage fees or accepting export caps to minimize or avoid these duties.

Forestry sector hit with new tariffs, adding to industry woes, says analyst

Canada has regularly appealed U.S. duties, including at panels set up under the North American Free Trade Agreement (NAFTA) and its predecessor, as well as the World Trade Organization.

It has been generally successful in arguing the U.S. duties were unfairly high.

There were also periods when trade was governed by various softwood lumber agreements, the most recent of which expired in 2015.

How is it affected by the U.S.-Canada trade war?

In 2017, the U.S. Commerce Department again concluded Canada's softwood imports were unfairly subsidized, and imposed duties.

These duties, which were amended in the summer of 2025, are known as anti-dumping duties — tariffs placed on imported goods when they are sold below market value — and countervailing duties, intended to cancel out tax breaks or subsidies a foreign government gives its own producers.

Taken together, they added 35 per cent to the cost of most Canadian softwood lumber in the U.S., according to Global Affairs Canada.

Separating fact from fiction in the U.S.-Canada softwood lumber trade war

Later that year, in October 2025, the Trump administration imposed an additional 10 per cent tariff on softwood lumber following a Section 232 national security investigation into imports of timber, lumber and their derivative products.

This was in response to a report by the U.S. commerce secretary, which found wood product imports are "resulting in the persistent threats of closures of wood mills and disruptions of wood product supply chains, among other things," Trump said in a September 2025 proclamation announcing the tariffs.

The October 2025 duties brought the total tariff level on most softwood lumber imported from Canada to 45 per cent. They also added 25 per cent duties to imports of upholstered furniture and kitchen cabinets and vanities.

Most recently, the Trump administration imposed another round of tariffs under Section 338 of the Tariff Act of 1930, which took effect last week.

These 50 per cent tariffs are in response to what U.S. President Donald Trump called discriminatory Canadian treatment of U.S. motor vehicle, alcohol and dairy exports and apply to a wide range of products.

How 50% U.S. tariffs will impact the average British Columbian

Fact-checking the White House statement of facts about Canada

They don't apply to products, including those from softwood lumber, already subject to the Section 232 tariffs.

But they do hit a wide range of value-added wood products worth about $4 billion, including plywood, wood mouldings and particle board, according to Forest Products Association of Canada president and CEO Derek Nighbor.

U.S. reaction is divided, with the lumber industry largely supportive, and those forced to pay higher prices for building materials — such as the National Association of Homebuilders — opposed.

"Building material tariffs heighten market uncertainty, strain supply chains and increase construction costs," the association said in a statement.

"As the president continues to advance his tariff agenda, NAHB is urging the administration to exempt building materials in light of the ongoing housing affordability crisis."

The U.S. Lumber Coalition's van Heyningen applauded the tariffs.

"Our industry is not able to produce to their full capacity, and they're not able to expand, when Canada takes up an artificially high market share because they're dumping their excess lumber capacity into the U.S. market," he said in an interview.

"So it's very much a jobs issue for us as well."

The Forest Products Association of Canada's Nighbor argued the shortfall in Canadian lumber has been made up with imports from the European Union, which faces a much lower U.S. tariff rate of 15 per cent.

"Americans cannot meet their domestic needs," he said. "And right now, even though the Canadian numbers are down, it's the Europeans who have primarily benefited from that."

Tara Carman is a senior reporter with CBC British Columbia. She has been a journalist in Vancouver since 2007 and previously worked in Victoria, Geneva and Ottawa. You can reach her at tara.carman@cbc.ca