Amid the US government led by President Donald Trump seeking to reshape the global trade system, one of the longest-running international trade disputes in the North American region has once again come into focus.
The United States is reconsidering how to handle the significant amount of softwood lumber imported from Canada. Since the 1980s, these two neighboring countries in North America have been embroiled in disputes over this forestry product.
The root of the dispute partially stems from differences in land and forest ownership. In Canada, 90% of the vast forests are public resources. Canadian provincial governments, rather than private markets, determine which logging companies can access these resources and how much they need to pay for the privilege of logging.
In the U.S., 90% of timberland is privately owned. Landowners can decide when to harvest and set their own pricing standards.
Due to these differences, the national industry organization U.S. Lumber Coalition believes that Canadian wood products receive government subsidies, artificially lowering their prices.
The U.S. timber industry is constrained by product demand and prices, while Canadian lumber companies can cut wood as they please anytime, anywhere.
The U.S. timber industry argues that Canadian producers subsequently dump their cheap lumber products into the U.S., weakening the strength of the American timber industry.
Since taking office in January, President Trump has been openly pressuring Canada on international trade issues.
He has expressed dissatisfaction with Canada’s protectionist economic policies, imposed new tariffs on certain Canadian goods, and threatened to increase further tariffs.
Historically, according to the 1988 Canada-United States Free Trade Agreement, the 1992 North American Free Trade Agreement (NAFTA), and the 2019 United States-Mexico-Canada Agreement terms, trade barriers and tariffs between the U.S. and Canada have been minimal.
Starting from March this year, the U.S. has imposed a 25% tariff on Canadian goods not protected under the United States-Mexico-Canada Agreement. Zoltan van Heyningen, Executive Director of the U.S. Lumber Coalition, stated that Canadian lumber, as compliant with the agreement, has been and will continue to be exempt from these tariffs.
However, van Heyningen mentioned that the U.S. is imposing general anti-dumping and countervailing duties on imported softwood lumber.
The current tariff rate set by the U.S. Commerce Department is 14.4%. Van Heyningen told The Epoch Times that the rate is expected to more than double to 34.45% after the administrative review of the current rate concludes later in 2025.
He said the Commerce Department has determined that Canadian lumber exporters benefit from artificially low production costs, and these tariff rates are set to offset that impact.
The U.S. Lumber Coalition is an alliance of softwood lumber producers and timberland owners in the U.S., dedicated to addressing what they perceive as unfair Canadian lumber trade practices.
Although the tariff issue dominates international trade news in 2025, the timber dispute between the U.S. and Canada has a history of over forty years. In 1982, the U.S. Commerce Department initiated an investigation into the so-called stumpage fees in Canada, which soon led to tariffs on Canadian lumber imports.
Over the following years, the two countries have intermittently disputed this issue, often seeking resolution in the World Trade Organization (WTO) and the North American Free Trade Agreement (NAFTA) arbitration mechanisms.
The U.S. and Canada have drafted four different versions of the so-called Softwood Lumber Agreement in an attempt to resolve this issue.
The U.S. timber industry is currently filing its fifth round of trade litigation against what it deems as unfair commercial practices by Canada, targeting the U.S. Commerce Department and the United States International Trade Commission.
A Royal Bank of Canada analysis report released in March this year revealed that Canada is a significant exporter of softwood lumber globally, with forestry products accounting for approximately 7.5% of the country’s total exports, amounting to $33.4 billion. The report was authored by independent Canadian consultant Ajay Nandalall.
Nandalall stated that Canada’s forestry industry “overly depends on the U.S. market,” with close to 70% of forestry exports heading to the U.S.
In July, the U.S. initiated a Section 232 investigation to determine if “unfair subsidies and foreign government support for foreign wood, plywood, and related products” pose a national security risk.
A presidential executive order issued in March stated: “The U.S. faces significant risks from dumped foreign wood, plywood, and related products flooding the U.S. market.”
The order instructed Commerce Secretary Howard Lutnick to undertake the investigation and report the results by the end of 2025.
Representatives from the U.S. Commerce Department, the U.S. International Trade Commission, and the Canadian Embassy in the U.S. did not immediately respond to The Epoch Times’ request for comments.
Aside from international issues, this enduring timber dispute has led to opposition between various industries in the U.S.
On one side are timber producers primarily represented by the U.S. Lumber Coalition, supporting measures to restrict what they perceive as Canada’s dumping of products, artificially deflating U.S. wood prices and impacting domestic demand for American lumber products.
On the other side are U.S. wood buyers seeking to purchase wood products at the lowest possible prices.
The National Association of Home Builders (NAHB), representing companies constructing single and multi-family homes in the U.S., has strongly opposed measures they believe will increase housing prices.
NAHB Chairman Buddy Hughes stated that his organization opposes tariffs because they have “a detrimental effect on housing affordability.”
“Housing, consumers, and homebuilders are being taxed. Tariffs, both good and bad, along with the threat of higher tariffs, have had a negative impact on housing affordability, leading to business uncertainty and disrupting the supply chain for building materials,” Hughes said in a statement provided to The Epoch Times.
Hughes added that the U.S. currently relies on wood imports and cannot domestically produce enough wood to meet the nation’s needs, even if willing. He noted that “building the necessary infrastructure to convert raw logs to lumber will take many years.”
U.S. Lumber disagrees with this assessment. Van Heyningen explained that lumber costs make up less than 2% of total home costs.
Additionally, lumber costs have decreased by at least 67% since reaching their peak in May 2021. Meanwhile, new home costs have risen by 21% during the same period.
Van Heyningen noted that import tariffs are not paid by customers but by Canadian lumber companies. He cited that since 2016, recorded importers in the U.S. have paid at least $7 billion in fees, owned by major Canadian companies like West Fraser Timber and Canfor.
“So, lumber prices do not affect Americans’ housing affordability,” Van Heyningen said.
Regarding capacity, Van Heyningen believes that current U.S. policies are effectively slowing down the flow of Canadian softwood lumber into the U.S. Canada’s market share has declined to the lowest level since the 1970s, partly due to the Trump administration taking a tougher enforcement stance.
With a reduction in Canadian lumber entering the U.S., U.S. domestic producers have increased output. Since 2016, U.S. lumber production has risen while Canadian production has declined.
For instance, according to data provided by Forest Economic Advisors based in Massachusetts to The Epoch Times, U.S. sawmill production capacity has grown by approximately 9 million board feet since 2016, while Canadian sawmill capacity has dropped by about 3 million board feet.
Van Heyningen stated that the additional production capacity demonstrates that, without Canadian competitors undercutting prices, the U.S. is capable of planting and processing enough wood to meet domestic demands.
He believes that with a fairer trade relationship between the U.S. and Canada, the U.S. could achieve self-sufficiency in lumber.