Over the course of my fifty-year career, I have never seen so much misinformation, distortion and political theatre as in 2025. The Trump presidency has ushered in a new era of United States protectionism, primarily through tariffs, a strategy that has adversely affected nearly all exporters to the US, with Canadian softwood lumber being a prominent target.
Political Rhetoric and Misinformation
The recent surge in rhetoric and written attacks aimed at Canada and its softwood lumber industry has been both amusing and perplexing. David Elstone of SparTree Group and I have responded directly to the error-filled communications from the Softwood Lumber Coalition (SLC), presenting the actual facts. Notably, our factual rebuttal has never been contested, likely because the truth stands on its own. While other instances of misinformation from the US side remain, they will be addressed at another time.
The momentum of misinformation continues, with US protectionism and the unrealistic notion of self-sufficiency in softwood lumber production being vigorously promoted. The underlying strategy is clear: penalize all exporters with tariffs to reduce imports, leverage US Trade Law to escalate Canadian duties, inflate US lumber prices, and thus force US lumber buyers to subsidize domestic timber and lumber producers. In this climate, free or fair trade has become undesirable for American lumber companies, especially since the burden of higher-priced lumber—both domestic and imported due to excessive tariffs—is ultimately borne by consumers, home builders and renovators.
US Trade Law as a Tool
US Trade Law has evolved into a permanent tool against Canadian lumber imports, relying on complex methodology to produce calculated duties. Paired with the current US tariff policy, these mechanisms serve to work against all lumber exporters to the US. Even recalling President Ronald Reagan’s 1987 comments supporting free and fair trade has now become contentious, with President Trump cancelling further trade negotiations with Canada. Interestingly, while I do not always agree with economists, there is consensus that tariffs are ineffective, echoing the arguments made by President Reagan.
Persistent Misinformation about Canadian Practices & Duty Methodologies
Misconceptions regarding the Canadian lumber industry persists, often lacking real or transparent facts. Several key topics seem to be misunderstood, particularly regarding some Canadian practices and US trade methodologies targeting Canada.
1. Canadian Timber Subsidies
A common misconception is that Canadian timber is subsidized. This issue is complicated by the fact that 90% of Canada’s forest lands are publicly owned, in contrast to the United States timberlands, the majority of which are privately owned. The US-led push for more market-based Canadian log prices (stumpage) occurred twenty years ago, yet the narrative of “cheap or subsidized Canadian logs” persists without evidence. For most of the past decade, British Columbia has had some of the highest delivered log costs in North America (with the exception of the US West), consistently resulting in the lowest sawmilling margins despite having some of the world’s most modern and efficient sawmills. Tight BC log supplies and high log prices—across company timber tenures, public auctions, and private sales—are the main drivers. However, the “timber subsidy” label is frequently cited in US claims, even though it does not reflect reality, especially in BC.
2. Countervailing Duties and Alleged Subsidies
Countervailing duties (CVD) on Canadian lumber, which are tied to alleged government subsidies, are excessive – currently at 14.63%. Governments in both countries provide support to their timber and wood products industries, especially during weak market periods. US States routinely offer subsidies to attract new investments in wood products, and similar Canadian programs exist to support regional initiatives.
The Canadian government has introduced a CDN$1.25 billion package to help lumber companies contend with the trade war and survive in the short term. Of this, CDN$700 million consists of loan guarantees—short-term, repayable loans that offset the heavy impact of US tariffs and higher duties. The remaining funds are directed towards innovative technologies and diversifying markets away from the US, a move that should be welcomed by Americans.
Despite similar activities in both countries, US Trade Law investigates any and all subsidies provided by Canadian governments, without calculating a “net differential” to determine which country provides more. The focus remains solely on Canadian subsidies, while US government support is ignored, resulting in CVDs on Canadian lumber.
3. Anti-Dumping Duties and Calculation Issues
Anti-dumping duties (AD) on Canadian lumber, based on claims of selling below domestic prices, are also excessive. The ADs are difficult to audit due to their opaque, non-public calculations. The US Department of Commerce (USDoC) requires two Canadian companies, West Fraser and Canfor, to provide cost information to assess Canadian duties, yet assessed markedly different AD rates—9.65% versus 35.47%, respectively—despite similar forests, operations, products, and markets. It is unclear why these two Western Canadian companies are used to represent all Canadian operations, considering over half of Canadian lumber is produced outside their regions (BC and Alberta), with Eastern Canada having its own distinct and different characteristics. All other Canadian companies pay the average of these two AD rates, or 20.53%.
Additionally, flat-rate annual CVD and AD duties based on commodity construction lumber are applied to all Canadian lumber under Harmonized System (HS) product code #4407. This includes high-value specialty products such as western red cedar, Douglas-fir, hemlock, Sitka spruce, yellow cedar, and some remanufactured lumber. The independent remanufacturers that produce specialty and value-added products are excessively penalized, even though they do not manufacture commodity lumber (they have no sawmills), as they purchase lumber on the open market. West Fraser and Canfor produce almost none of these specialty items, yet duties are imposed across the board. This “one rate fits all” approach is unfair and does not reflect the reality of the diverse Canadian lumber sector.
US Trade Law calculates lumber duties annually, with policies and rules becoming increasingly burdensome for exporters, often without a clear connection to actual market realities.
Alice Palmer of Sustainable Forests, Resilient Industry has recently examined some of the anti-dumping duty calculation methodologies. Two major biases are evident:
- “Normal” and “Constructed” Values: The latter is used when the USDoC believes a company’s domestic or export prices do not reflect actual sales values, automatically inflating AD rates for importers.
- Calculation Methods: The USDoC employs various techniques, including “Average-to-Average,” “Average-to-Transaction,” “Transaction-to Transaction”, “Zeroing,” and “Differential Pricing Analysis.” The “zeroing” method discards all positive value calculations, considering only dutiable (negative) transactions. In contrast, the “Average-to-Average” method averages both positive and negative sales, normally resulting in lower duties. As the WTO has repeatedly ruled against “zeroing”, the USDoC adopted a newer framework. This is “the differential pricing analysis”, and if used, it can still produce similar inflationary biases as “zeroing” by selectively excluding high-priced transactions.
Overall, the calculations for anti-dumping duties are extremely complex and appear biased. This is not an issue of Canada seeking special treatment, but rather a call for transparency and a fair, defensible methodology.
Summary and Perspective
The US market has a significant need for Canadian lumber, and lots of it. The objective of the Softwood Lumber Coalition (SLC) is to reduce Canada’s market share from approximately 23% of US lumber consumption to single digits, or ideally, zero. Achieving this goal would require substantial initiatives for the US timber and lumber industry to significantly ramp up output. This objective would likely include heavy restrictions on imported lumber from Canada, Europe, and the Southern Hemisphere, and a willingness to let consumers and builders bear higher prices, while exporters to the US would absorb the impact of duties and tariffs along with reduced shipments.
When US demand increases and imports are needed, domestic production will not suffice, leading to price spikes—potentially as soon as Q2 2026. Lumber price volatility will persist as long as excessive duties and tariffs restrict imports, with higher costs ultimately paid by American consumers, builders, and contractors, all to the benefit of US timberland and lumber producers.
While hard facts are the foundation of sound analysis, the intentionally opaque nature of the duty and tariff system makes accessing reliable data difficult.
In conclusion, I urge people to revisit President Ronald Reagan’s 1987 speech on free trade and tariffs, as well as the reports of numerous economists who oppose tariffs. The United States will continue to require billions of board feet of Canadian and other imported lumber. Tariffs will only heighten price volatility and drive prices higher. Fair trade stands to benefit both consumers and producers on both sides of the border, whereas protectionism will result in distinct winners and losers.
https://russtaylorglobal.com/canada-us-softwood-lumber-trade-when-trade-becomes-tactics/