The decades-long battle over softwood lumber between the United States and Canada has returned to the spotlight, driven by a wave of new tariffs, national security investigations, and rising economic pressure on both sides. According to The Epoch Times, this renewed confrontation is one of the longest-running trade disputes in North America, with major implications for both international relations and domestic industries.
The Core of the Conflict
At the heart of the dispute is a fundamental difference in how the two countries manage their forest resources. In Canada, about 90 percent of forest land is publicly owned and managed by provincial governments, which set the fees for logging and decide how much timber can be harvested. In contrast, the United States has a privately driven timber market, where about 90 percent of forest land is privately owned and prices are set through market competition.
This system, American lumber producers argue, gives Canadian companies an unfair advantage. The U.S. Lumber Coalition, an industry group representing American producers and landowners, contends that the Canadian model leads to artificially low prices for lumber. They believe Canadian producers are able to dump cheap softwood lumber into the U.S. market, undermining domestic companies and distorting competition.
Zoltan van Heyningen, executive director of the U.S. Lumber Coalition, told The Epoch Times, “The United States faces significant vulnerabilities in the wood supply chain from imported timber, lumber, and their derivative products being dumped onto the United States market.”
Trump’s Trade Strategy and New Tariffs
President Donald Trump has taken a tough stance on trade since returning to office, and the lumber dispute is a key part of his broader strategy to reset the global trade system. Since March, his administration has imposed a 25 percent tariff on a range of Canadian goods not protected under the United States-Mexico-Canada Agreement (USMCA). In July, Trump raised that rate to 35 percent, effective August 1.
Although Canadian lumber is technically exempt from USMCA-wide tariffs, it is still subject to separate duties imposed by the Department of Commerce. Currently, Canadian softwood lumber imports are taxed with a combined anti-dumping and countervailing duty of 14.4 percent. That rate is expected to more than double to 34.45 percent by the end of 2025 after an administrative review.
“These fees,” van Heyningen explained, “are designed to offset what the department has determined to be the artificially low cost of production enjoyed by Canadian lumber exporters.”
Since 2016, Canadian companies have paid more than $7 billion in duties, he said, and those costs are not passed on to American consumers but paid directly by the importers, who are often owned by major Canadian firms like West Fraser Timber and Canfor.
Canadian Pushback and Possible Compromise
Canadian officials deny that their system provides unfair subsidies and argue that their trade practices follow international rules. However, mounting economic and political pressure has led some Canadian leaders to consider options that were once off the table.
British Columbia Premier David Eby told Bloomberg News that Canada is now open to exploring limits on how much softwood lumber is exported to the United States. “We think there is actually an opportunity for lumber to be one of the early agreements and wins that are struck,” Eby said.
He acknowledged that the United States has long called for a quota system that would cap Canadian lumber exports. “And I think that, for the first time, there’s some willingness to have a conversation about what that could look like,” he added.
British Columbia and Quebec together accounted for 64 percent of all Canadian lumber exports in the previous year, making the potential impact of such a quota significant. Eby said the goal would be to stabilize access to affordable building materials for Americans while also protecting jobs for Canadian workers.
A National Security Investigation Raises the Stakes
In addition to raising tariffs, Trump signed an executive order in March that launched a Section 232 national security investigation into whether foreign timber imports threaten U.S. security. Commerce Secretary Howard Lutnick has been tasked with reporting findings by the end of 2025.
The investigation could provide legal grounds for even broader trade restrictions. While metals like steel and aluminum are essential for military equipment, the rationale for lumber is less direct. Still, a White House official told The Epoch Times that “the military was a major consumer of lumber,” and the administration believes that foreign reliance on timber could pose a risk.
This investigation has raised concerns in Canada, where lumber exports to the United States account for nearly 70 percent of the industry’s foreign sales. Forestry products represent about 7.5 percent of Canada’s total exports, valued at over $33 billion, according to the Royal Bank of Canada.
A Split Among U.S. Interests
Domestically, the lumber dispute has created divisions between American producers and American buyers. On one side, the U.S. Lumber Coalition supports tariffs and other trade measures that limit Canadian imports. They argue these steps are necessary to level the playing field and encourage domestic production.
On the other side are U.S. homebuilders and other buyers of lumber, who fear that higher prices could worsen housing affordability. Buddy Hughes, chairman of the National Association of Home Builders, told The Epoch Times, “The tariffs act as a tax on American builders, home buyers, and consumers.” He warned that construction costs could rise by nearly $11,000 per home due to the tariffs.
Hughes also said that the United States currently lacks the infrastructure to meet its own lumber demand and that it would take years to build the needed capacity.
Van Heyningen pushed back against that claim. He argued that the price of lumber has dropped by 67 percent since its peak in 2021, even as the average cost of a new home has risen by 21 percent. “Lumber just doesn’t affect housing affordability,” he said.
He also pointed to data showing that American sawmill output has increased by about 9 million board feet since 2016, while Canadian output has fallen by 3 million. This, he argued, shows that with proper trade enforcement, the United States can scale up domestic production.
The current lumber feud is the fifth major trade case filed by the U.S. lumber industry since the 1980s. Previous disputes have been addressed through World Trade Organization rulings, NAFTA arbitration, and four prior softwood lumber agreements. Despite efforts to reach a lasting resolution, the issue continues to resurface.
Now, with Canada signaling possible openness to a quota system and the United States conducting a sweeping national security review, there may be a window for a negotiated solution.
Still, tensions remain high. Trump recently sent Canadian Prime Minister Mark Carney a letter warning that more tariffs are coming unless Canada makes broader trade concessions. And Canada has already agreed to some U.S. demands, including dropping its digital services tax and increasing defense spending.
As Premier Eby put it, “We’re trying to bring forward proposals that historically have been off the table.”
Whether this marks the beginning of a new agreement or just another round in a long-standing dispute remains to be seen. For now, both countries are locked in a standoff over one of the most basic materials in the modern economy – wood.
